While many small business owners in America support a minimum wage increase, they simultaneously express concerns over worker affordability.

• A survey conducted by CNBC and SurveyMonkey in Q1 2024 found that 61% of small business owners favor increasing the minimum wage in their state.
• Despite the survey revealing that half (50%) of the respondents believe it could make it challenging to afford the workers essential to their businesses, there is still broad support for the proposed measure.

In the lead-up to the election, the economic well-being of Americans is of utmost importance. Small business owners, who are highly attuned to changes in policy, can provide valuable insights into voter attitudes towards inflation and the cost of doing business.

Small business owners in many states and cities are raising their minimum wage, with some exceeding the federal minimum wage to match local living costs. A recent survey of over 3,000 self-identified small business owners in the U.S. found that 61% support raising the minimum wage, while 50% believe it could be challenging to afford workers critical to their businesses. Despite this, small business owners express both support and concern over an increase in minimum wage.

Differences among generations, industries, and politics

Business owners have expressed support for minimum wage increases, hoping that higher salaries will increase customer spending, tax revenue, and employee satisfaction. However, some worry that a wage hike will harm profitability and reduce their ability to hire entry-level workers.

The CNBC|SurveyMonkey study found that business owners who are women, Black, under 45 years of age, Democrats, or work in the arts/entertainment or non-profit industry are more likely to support minimum wage increases. Additionally, younger small business owners believe that a minimum wage increase will help their business.

Those least likely to support minimum wage increases are men, over 45, white, Republicans, and those in manufacturing or agriculture.

A majority of small business owners who have not filled job openings in the last three months are divided in their support for minimum wage increases, with slightly more than half (54%) in favor and under half (45%) against. Additionally, two-thirds (68%) of these business owners express concerns about their ability to hire new employees due to wage increases.

Widespread worry over the potential impact on their business

Small business owners are divided on whether a minimum wage hike will affect their ability to hire new employees. While half (50%) believe an increase will make it harder to hire, just under half (49%) do not expect any impact. Notably, twice as many small business owners with unfilled job openings within the last three months believe that a higher minimum wage will mostly harm instead of help their business (51% vs. 25%). Even proponents of a minimum wage increase worry about its impact on their bottom line, with business owners who are women (45%), younger (58%), and Black (46%) expressing concerns about worker affordability despite being the groups most likely to support such policies.

Although a majority of people support raising the minimum wage, small business owners are unsure about its potential impact on their own businesses. Only 19% of small business owners believe that a higher minimum wage will benefit their business, while 61% support it. On the other hand, 38% of small business owners believe that an increase in the minimum wage would harm their business.

The ongoing debate over minimum wage laws highlights the complexities of the issue for small business owners. For over a decade, the Fight for $15 movement has pushed for higher wages, and many communities are struggling with high living costs. As more states and cities implement higher minimum wages, it will be fascinating to observe how the opinions of small business owners change.