Executive Summary Purpose and method of this report

The base salary at Regal Potomac Yard 16 is one of the lowest in the surrounding area. Although minimum wage differs from business to business, the $8.00/hour should be raised to $10.00/hour. Often businesses are afraid to increase minimum wages. They believe it could have a negative impact on the local economy and could result in lower profits. However, research demonstrates raising the minimum wage may have little to no impact both short-term and long-term in developed countries like the United States with regards to the economy. Furthermore, some research suggests such a change may improve profits for businesses due to higher productivity levels in employees. The purpose of this report is to:

· Understand why increasing the minimum wage at Regal will improve worker productivity.

· Recommend reasons why the minimum wage increase will at worst, promote no significant change to profitability for Regal, at best, promote higher employee retention.

By conducting a brief literature review, we learned of the limited effects raising the minimum wage has on businesses. Negative or positive, studies demonstrated no statistical significance in the local economy or the profitability of businesses when minimum wages are raised. Comparing the minimum wage of in Regal Potomac Yard 16 to other businesses in the area, Regal had the lowest. The same can be said of other theatres nearby that had at least 25 cents higher minimum wage than Regal Potomac Yard 16.

Conclusions

Most of the literature review illustrated raising the minimum wage does not have a negative impact on a company’s profits and the local economy. However, the evidence rings true for those in developed countries. Businesses that raise minimum wage in underdeveloped nations may result in negative outcomes like job dismissal, increased stress due to job loss, and lower profits from a smaller workforce.

Table of Contents

Contents

Executive Summary 1

Table of Contents 2

Introduction 3

Body 3

Effects of minimum wage increase on productivity 3

Effects of minimum wage increase on local economy 4

Define minimum wage gaps within local area 4

Conclusions and Recommendations 4

References 5

Introduction

Beneficial effects come from minimum wage increases. The base salary at Regal Potomac Yard 16 should be raised from $8.00/hour to $10.00/hour because...

Higher productivity and increased morale are already seen in the United States in the service industry, particularly restaurants (Lynn & Boone, 2015). The service industry makes up a large sector of employment, including employees working in theatres and cinemas.
Although the fear is understandable regarding profit loss as seen in other countries like South Africa where businesses began to layoff employees due to minimum wage changes (Bhorat, Kanbur, & Stanwix, 2014), other countries demonstrate negligible effects. Vietnam for example, showed no statistically significant change after implementation (Cuong, 2013). Overall, the potential negative consequences are not seen when regarding larger sample sizes and both long-term and short-term effects (Cuong, 2013). Additionally, positive effects like employee morale and employee retention should be regarded when considering minimum wage increases.

Because the differences may be negligible regarding profitability and local economy but can lead to improved morale and employee retention amongst employees (Jardim et al., 2017), why can it not be a technique utilized by Regal Potomac to improve overall employee quality within the company? Such a concept has shown marked success for businesses within the serving industry. It may lead to improvements that may in turn increase the company’s competitive advantage against its local competition. When compared with their competitors, Regal Potomac has the lowest minimum wage and should increase based on potential positive effects. As a result of this report, my reader/s will know:

-How increasing minimum wages affects productivity.

-How increasing minimum wages affects the local economy and promotes competitive advantage.

Body

Effects of minimum wage increase on employee retention and productivity

Because Royal Potomac Yard has the lowest minimum wage and so many competing theatres nearby have increased their minimum wages, they are facing stiff competition not just regarding customers but recruiting employees. The effect of minimum wage increases in the surrounding area have resulted in improved competitive advantages for every theatre except Regal Potomac Yard. The service industry in the United States has seen an improvement among employee productivity and morale (Lynn & Boone, 2015). The theatres competing with Regal Potomac are a…