Businesses & Money

Info dump

1. access to capital for small businesses
2. wages
3. costs - healthcare

• If firms have to pay more for inputs, we will have to reduce cost of capital

Minimum wage criteria

General

The following information taken from (USDL)

• Under the Fair Labor Standards Act (FLSA), the federal minimum wage for covered nonexempt employees is $7.25 per hour.
• Effective since July 24, 2009.
• Some states have minimum wage criteria that diverges from the federal government. Where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher minimum wage rate.
• Enforced by the Wage and Hour Division of the U.S. Department of Labor.

Exceptions

The following information taken from (USDL)

• Various minimum wage exceptions apply under specific circumstances to workers with disabilities, full-time students, youth under age 20 in their first 90 consecutive calendar days of employment, tipped employees, and student-learners.
• Tipped Workers: Minimum wage for tipped employees is $2.13 an hour in direct wages, if that amount plus the tips received equal at least the federal minimum wage. If an employee's tips combined with the employer's direct wages of at least $2.13 an hour do not equal the federal minimum hourly wage, the employer must make up the difference.
• Disabled workers: Employers can apply for a certificate to pay less than the minimum wage to anyone "whose earning or productive capacity is impaired by a physical or mental disability, including those relating to age or injury." Hourly pay is based on the employer's assessment of their productivity relative to the productivity of non-disabled workers.
• Very small businesses: Only applies to employees of enterprises that have annual gross volume of sales or business done of at least $500,000 and haven't done business across state lines.

Healthcare's impact on business

• The Bureau of Labor Statistics found only 57 percent of workers at firms with 100 employees or less have access to employer-sponsored health care. (BLS)
• In a recent national survey by Bank of America, 72 percent of small-business owners said they are concerned about health-care costs. [1]

Changing nature of raising capital

The following information taken from (Bank of America)

• Only 29 percent of small business owners said they’ve applied for a business loan over the last two years
  • 90% of those who applied were approved
• More than half (58%) of Millennial small business owners applied for a business loan within the last two years, nearly twice that of Gen-Xers (30%). Friends and family are an important source of funding for Millennial small business owners, with 30% saying they’ve received a loan from their loved ones in the past. Millennial small business owners are nearly five times as likely as Gen-Xers to have received past funding from a peer-to-peer network, while Boomers (25 percent) were more than twice as likely as Millennials (10 percent) to have received funding from a home equity loan/other personal debt.