Raising Minimum Wage at Regal Potomac Yard: A Business Case
This business report recommends raising the minimum wage at Regal Potomac Yard 16 from $8.00 per hour to $10.00 per hour. Drawing on a brief literature review and a survey of competing businesses in the Potomac Yard area, the report argues that such an increase would have negligible negative effects on profitability or the local economy while potentially improving employee morale, productivity, and retention. The report also documents that Regal Potomac Yard currently offers the lowest minimum wage among nearby movie theatres and retail businesses, placing it at a competitive disadvantage in both customer service quality and employee recruitment.
- Executive Summary: Report purpose, method, and key conclusions
- Introduction: Case for raising Regal's minimum wage
- Effects of Minimum Wage Increase on Employee Retention and Productivity: Wage increases improve morale and recruiting
- Effects of Minimum Wage Increase on the Local Economy: Local wage trends support feasibility of increase
- Minimum Wage Gaps Within the Local Area: Competitor wage data reveals Regal's disadvantage
- Conclusions and Recommendations: Five actionable steps to raise and assess wages
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What makes this paper effective
- The report grounds its recommendation in a literature review spanning multiple countries, lending credibility to the claim that minimum wage increases have negligible negative effects in developed economies.
- It uses concrete, localized wage data — listing specific competing businesses and their starting wages — to make an abstract policy argument immediately actionable for its audience.
- The numbered conclusions and recommendations at the end provide a clear, executive-friendly roadmap that separates evidence from prescription.
Key academic technique demonstrated
The paper demonstrates effective use of a brief comparative literature review to support a business recommendation. By citing studies from the United States, Vietnam, and South Africa, the author acknowledges cross-national variability while isolating the developed-country context most relevant to the recommendation. This framing technique — acknowledging counterevidence and then limiting its scope — strengthens the argument's credibility.
Structure breakdown
The report follows a standard business-report format: an executive summary previews the purpose and conclusions; an introduction contextualizes the problem; three body sections address productivity, local economy, and a wage-gap analysis; and a final section delivers numbered conclusions and five actionable recommendations. References are formatted in APA style. The structure is well-suited to a managerial audience seeking both evidence and a clear course of action.
Executive Summary
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 current rate of $8.00/hour should be raised to $10.00/hour. Businesses often fear that increasing minimum wages could have a negative impact on the local economy and result in lower profits. However, research demonstrates that raising the minimum wage may have little to no impact — both short-term and long-term — in developed countries like the United States with regard to the economy. Furthermore, some research suggests such a change may actually improve profits for businesses through higher employee productivity levels.
The purpose of this report is to:
- Understand why increasing the minimum wage at Regal will improve worker productivity.
- Recommend why a minimum wage increase will, at worst, produce no significant change to profitability for Regal, and at best, promote higher employee retention.
By conducting a brief literature review, we learned of the limited effects that raising the minimum wage has on businesses. Whether 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 at Regal Potomac Yard 16 to other businesses in the area, Regal had the lowest. The same held true for nearby theatres, all of which offered at least $0.25 more per hour than Regal Potomac Yard 16.
Most of the literature reviewed illustrated that raising the minimum wage does not negatively impact a company's profits or the local economy. However, this evidence applies most strongly to developed countries. Businesses that raise minimum wages in underdeveloped nations may experience negative outcomes such as job dismissal, increased stress due to job loss, and lower profits from a reduced workforce.
Introduction
Beneficial effects can result from minimum wage increases. The base salary at Regal Potomac Yard 16 should be raised from $8.00/hour to $10.00/hour because doing so will raise worker morale and productivity, while having a minimal effect on profitability and the local economy (Allegretto & Reich, 2017). Higher productivity and increased morale are already observed in the United States service industry, particularly in restaurants (Lynn & Boone, 2015). The service industry represents a large sector of employment, including employees working in theatres and cinemas.
Although fears about profit loss are understandable — as seen in countries like South Africa, where businesses began laying off employees following 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, potential negative consequences are not observed when examining larger sample sizes and both long-term and short-term effects (Cuong, 2013). Additionally, positive outcomes such as improved employee morale and retention should be factored into any consideration of minimum wage increases.
Because the differences regarding profitability and the local economy may be negligible — but can lead to improved morale and employee retention (Jardim et al., 2017) — a wage increase represents a viable technique for Regal Potomac to improve overall employee quality. Such a concept has shown marked success within the service industry and may lead to improvements that increase the company's competitive advantage against local competitors. Compared to those competitors, Regal Potomac currently has the lowest minimum wage and stands to benefit from an increase. As a result of this report, readers will understand:
- How increasing minimum wages affects employee productivity and retention.
- How increasing minimum wages affects the local economy and promotes competitive advantage.
Effects of Minimum Wage Increase on Employee Retention and Productivity
Because Regal Potomac Yard has the lowest minimum wage among nearby theatres, it faces stiff competition — not just for customers but also for employees. Minimum wage increases at surrounding businesses have resulted in improved competitive advantages for every theatre except Regal Potomac Yard. The service industry in the United States has seen improvements in employee productivity and morale following wage increases (Lynn & Boone, 2015), and the competing theatres near Regal Potomac illustrate this dynamic clearly. Because prospective employees recognize that they can earn more at Regal Potomac Yard's competitors, many do not even consider applying at that location.
Furthermore, higher productivity can yield greater profits for companies (Lynn & Boone, 2015), supporting the conclusion that raising the minimum wage at the Potomac Yard location from $8.00/hour to $10.00/hour is the most sensible course of action. Retaining experienced, motivated employees reduces turnover costs and sustains service quality — both critical factors in the competitive cinema market.
References
Allegretto, S., & Reich, M. (2017). Are local minimum wages absorbed by price increases? Estimates from internet-based restaurant menus. ILR Review, 71(1), 35–63. doi:10.1177/0019793917713735
Bhorat, H., Kanbur, R., & Stanwix, B. (2014). Estimating the impact of minimum wages on employment, wages, and non-wage benefits: The case of agriculture in South Africa. SSRN Electronic Journal, 96(5), 1402–1419. doi:10.2139/ssrn.2184248
Cuong, N. V. (2013). Do minimum wage increases matter to firm profitability? The case of Vietnam. Journal of International Development, 29(6), 790–804. doi:10.1002/jid.2920
Hoffman, S. D. (2015). Are the effects of minimum wage increases always small? A reanalysis of Sabia, Burkhauser, and Hansen. ILR Review, 69(2), 295–311. doi:10.1177/0019793915610558
Horn, B., Maclean, J., & Strain, M. (2017). Do minimum wage increases influence worker health? Economic Inquiry, 1. Retrieved from ftp://repec.iza.org
Jardim, E., Long, M., Plotnick, R., Van Inwegen, E., Vigdor, J., & Wething, H. (2017). Minimum wage increases, wages, and low-wage employment: Evidence from Seattle. doi:10.3386/w23532
Lynn, M., & Boone, C. (2015). Have minimum wage increases hurt the restaurant industry? The evidence says no! Center for Hospitality Research Reports.
Meer, J., & West, J. (2016). Effects of the minimum wage on employment dynamics. doi:10.3386/w19262
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