The Truth About Minimum Wage Increase | Ep 67
Build with Leila Hormozi
Leila Hormozi
5 • 867 Ratings
🗓️ 29 August 2023
⏱️ 12 minutes
🧾️ Download transcript
Summary
"If we are spending this much time on these kinds of things, it would be better spent trying to solve the root cause of this issue." Today, Leila (@LeilaHormozi) talks about the looming minimum wage increase and its potential impact on businesses. She breaks down the arguments for and against the increase, and offers suggestions for how businesses can adapt to the changing landscape.
Welcome to Build where we talk about the lessons I have learned in scaling big businesses, gaining millions in sales, and helping our portfolio companies do the same. Buckle up, because we’re creating an unshakeable business.
Timestamps:
(1:35) - Minimum wage increase raises employee salaries.
(2:25) - Arguments for higher minimum wages: cost of living.
(3:59) - Negative effects: layoffs, investment in technology, skilled workers.
(7:29) - Predicted outcomes: higher prices, technology investment, outsourcing.
(11:20) - Higher minimum wage laws may not have long-term impact.
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Transcript
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| 0:00.0 | Not saying people shouldn't be compensated with standard living. I'm just saying this isn't going to get us out of this cycle. It's only going to perpetuate the cycle. So I think that it's going to be irrelevant. It's not going to make a difference to anyone at all. I think it's kind of like it's all this effort and activity in the government and it's not going to produce anything. How do you create an unshakable business? |
| 0:21.5 | I cross $100 million in net worth by the age of 28. |
| 0:24.5 | Now I'm growing acquisition.com into a billion dollar portfolio. |
| 0:27.7 | In this podcast, I share the lessons I've learned in scaling big businesses |
| 0:30.7 | and helping our portfolio companies do the same. |
| 0:33.4 | Buckle up and let's build. |
| 0:39.0 | Topic of the day is something that's been really kind of reemerged in the business world right now, |
| 0:45.8 | probably because of the absurd increase in gas prices, |
| 0:47.7 | which is the minimum wage increase that is kind of looming in the background that was talked about in 2021. |
| 0:53.3 | And basically what that is, |
| 0:54.2 | if you don't know, is right now the minimum wage is $7.25, that's set to be $15 an hour in 2025, |
| 1:00.6 | incrementally increasing until that point. And so that being said, the minimum wage has increased |
| 1:04.3 | 22 times since 1938. So this is frequent. What does it mean? It's kind of the question. |
| 1:09.7 | I think obviously everybody knows that anyone that has hourly employees, their margins are going to suffer. |
| 1:14.1 | But I think a lot of people that don't have hourly employees wonder how this is going to affect them. |
| 1:17.9 | And so just to kind of explain, if there's higher state minimum wages, then the minimum salary for an employee to be exempt is going to change. |
| 1:26.8 | Because what this means is that employees |
| 1:28.1 | will most likely also have to increase salaries to exempt employees or reclassify them as non-exempt |
| 1:33.8 | and pay overtime premiums. And so what that means essentially is that as you move this up, |
| 1:38.1 | in order for that next level of an employee in your company to actually be classified as that |
| 1:42.9 | exempt, then that means that they have to |
| 1:45.0 | increase their salary. And so it seems like we're just increasing hourly, but we're increasing |
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