Are the Jobs the Real Cost of Minimum Wage Hikes?

Entry level jobs are typically paid minimum wage, a price that has been decreed fair compensation by public, firms, and government. But recently public and government have diverged from most firms, asking for a hike in minimum wage. Perceived to make the wage livable and grow the economy through consumption; it actually disrupts market equilibrium.

Entry level jobs are considered necessary to keep a business running. They often perform tasks that are considered monotonous and non-income generating while still being operationally necessary. But raising minimum wage above the value of these tasks will shrink the need for people to fill these tasks. This contracts the entry level job market by reducing hiring. Current entry-level jobs, increasing already over considerable legislation such as healthcare, only go up more to pay an employee. But the social pull of minimum wage raise is being felt all over the company, with some states such as NY paying some workers $15 an hour.

The reality is that minimum wage will rise. And while there are some jobs that can afford to ignore more workers, Accounts Payable is not one of those. Every business needs to have a healthy accounts payable department with room to grow. AP is the department that deals with invoices, something that is necessary for operational functions. Yet minimum wage will hike the cost per invoice something many business can not afford. Since cost per invoice is accounted for roughly by hours spent on the invoice x the hourly pay x the number of employees divided by the number of invoices, hiking the hourly pay can cause this number to grow astronomically large.

Yet there is an solution to this. By automating data input you can cut down on the cost per invoice, saving your business valuable money. A huge step of creating an invoice is inputting the data. By automating this process and getting rid of the need for human components on every step (hence saving on the hours spent on invoice and number of workers), cost per invoice can be dramatically cut down. Data input automation is ahead of the curve and ahead on saving money.

If your business would like to know more about data automation please contact Biel’s today.