What happens to the small businesses, the “mom and pop” shops, the entrepreneurs, the people in this life that are trying to make a comfortable living for themselves without having to work in the corporate world? For an example let’s take a pizza shop. Say the owner has been able to balance his costs and profit so he can live a comfortable middle class life. Now, with the minimum wage increase, his costs have increased, decreasing his profits. At this point his options are: sell more product, increase his prices, cut costs in his personal life, get rid of some employees, or sell/close the business to pursue a different career.

Selling more product will increase both cost and profit, and it may take some time going negative before he finds the correct balance. He may not be in a position to afford this option. Again he is not wealthy and is only living a comfortable middle class life. He probably does not have enough in savings to cover this.

Increasing his prices may work to gain his balance again, but may also result in losing customers due to the increased prices. Also, from what I have followed so far in this post, prices are claimed to not increase because of minimum wage increases.

Cutting costs in his personal life would decrease his quality of living. I throw out this option because the premise behind raising minimum wage is to better the quality of living.

Getting rid of some employees may work as well, but this would also have some negative effects that may throw off the balance. Again, this would also decrease quality of life for the employees that were terminated.

I am far from as knowledgeable about the situation as the people debating this in the comment thread and am ultimately posting this as a question. This situation definitely seems negative, but I understand that I may have missed some factors into this.

The article states, “The Canadian Federation of Independent Business says that small businesses will be forced to cut staffing as a result”. It never refutes this claim. I would like to add that it seems the small business may close down as well. Are we to look at this situation as a casualty to the “greater good”?