Why small business owners benefit from paying better wages

Image by mohamed Hassan from Pixabay

By Michelle van Schouwen

We hadn’t seen our lawn care company in over three weeks and the grass was getting long at our southwest Florida home. When the crew finally showed up, it was the owner and one employee. We rarely see the owner, but today, he did the mowing.

“No one wants to work!” “I can’t find workers.” I’ve heard this  a lot recently not just from the lawn folks, but from a number of small business owners. (Last week, it was the owner of the organic pest control company. He says he’s offering $15 per hour but not getting applicants for an opening. The week before, it was a local cabinet contractor.)

Many people are laying the blame on the more generous unemployment benefits some workers have been receiving during the COVID pandemic. While it’s true that if someone can make more on unemployment than they can working, they may be tempted to stay home, the truth is a lot more complex.

The hard truth is, working has to be worth the bother. Minimum wage, in much of the U.S., doesn’t allow a full-time worker to move above the poverty level. It makes it hard to pay rent, utility, and food bills, let alone to have a babysitter during the workday, or compensate a neighbor for meeting the kids at the bus stop after school. Even wages somewhat above the minimum wage render it tough for people to prepare for car repairs, a medical bill, or college (of any variety) for the kids.

As a longtime business owner, I believe that the benefits of paying a real living wage for any job that you want someone to do, plus what benefits you can afford, outweigh the short-term savings of paying the least you can. For highly skilled jobs, the ante goes up, of course.

Believe me, I know money can be tight, and employee compensation is one of your biggest expenses. And we all understand that the number that defines a “living wage” varies in different parts of the U.S. Nevertheless…

-A decent wage helps you get better employees. Applicants who have the choice between your company or a lower-paying job will generally choose yours. Better employees do better work.

-Your retention of good employees will be higher when you pay more, assuming all other factors are even (e.g. you don’t yell at people or expect them to work 80 hours a week).

-Better employees will help earn you a stronger reputation among customers and the public, because your product and your customer service will be more positive with competent, happy, and hopefully longer-term employees.

-Well-paid employees are somewhat less likely to be disgruntled and talk dirt about your company, whether to other employees, customers, or the world at large.

-Best of all, great employees do a lot of the day-to-day work while you work on the business. (Hence, you aren’t the one mowing the lawn anymore!)

What if you can’t pay what you’d like to offer, because you simply aren’t pulling in that much? Aim to get to that point. To get you started, offer non-cash compensation in addition to pay – extra time off, flexible hours, or remote work arrangements, for example. Strive toward having a company where employees, whether running a cash register or organizing the finances, can make a long-term career. Or where you can assure you can get seasonal help when you need it, because you pay enough to be a top-choice company.

This will be good for you, and for your company. Last but not least, you’ll be doing the right thing.


Michelle van Schouwen is principal of Q5 Analytics, providing advocacy and communications for climate change mitigation and adaptation. See Q5 Analytics.org. For 32 years, Michelle was president of van Schouwen Associates, LLC (vSA), a B2B marketing company. In 2017, van Schouwen Associates was acquired by Six-Point Creative Works, Inc.  of Springfield, MA. Michelle is available for speaking engagements on topics including her work on climate crisis mitigation and Florida coastal water issues. She speaks to business and student groups about marketing launches and entrepreneurship and works with start-ups to support their development.


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