What is the impact of minimum wage increases on businesses?

The impact of minimum wage increases on businesses in Maryland depends on the size of the increase. Generally speaking, increases to the minimum wage typically lead to an increase in labor costs for businesses. That’s because businesses either have to pay their employees more, or they have to raise prices to make up for the higher labor costs. That said, businesses may not have to increase labor costs if their employees are already making more than the minimum wage. Also, businesses may be able to absorb increases in labor costs if they are able to increase their profit margins by raising prices, cutting costs, or increasing efficiency. Overall, businesses must consider the long-term impact of increasing minimum wage on their overall profitability. Increases in labor costs may be offset by improved sales due to higher employee morale and retention, as well as a decrease in worker turnover. However, businesses can also be negatively impacted by minimum wage increases if they are unable to absorb the increased labor costs. This can result in an increase in prices, a decrease in services, or layoffs.

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What is the impact of minimum wage increases on businesses?

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