If you pay much attention to politics or economics, currently or in the last decade, you will know that a significant talking point of the political left has been increasing the national minimum wage. Like Vermont’s Senator Bernie Sanders, far-left members of Congress have pushed for this for some time, claiming that we are not doing enough for the American worker and this would be a move in the right direction.
And in some respect, that is true. The American worker deserves our nation’s respect and gratitude, particularly when the pandemic has taken so much from them.
Following the advice of those like Sanders, President Biden plans to give them what they need by possibly increasing the minimum wage nationally from $7.25 an hour to $15 an hour. The change would quite obviously more than double workers wages in some areas and companies, which sounds great.
But it’s not quite as simple as just giving people more money, as much as we’d like to.
That money has to come from somewhere. And that usually means their employers profits.
Now for massive companies like Amazon, Google, and even Target and McDonalds, it’s a fairly easy change. Instead of building ten new stores or restaurants in the next year, they simply decide to only create about five or so, and of course, increase menu prices some.
But what about for smaller businesses that are already struggling to make ends meet?
Well, according to liberal CA Representative Ro Khanna, we don’t need those businesses anyway.
And yes, he actually said that.
During a recent interview between Khanna and CNN anchor Abby Phillip on “Inside Politics,” the topic came up.
Phillip asked him what he thought about the potential increase and if now was the right time for it to happen.
“Is now the right time to increase it to $15? And I should say the bill has stages, of course, but immediately it would go up about 30 percent right now. Is now the right time to do that?”
Khanna responded, “Abby, it’s absolutely the right time to give working Americans a raise. Let’s look at the facts. Amazon raised their wage to $15 nationally, not regionally. They have more jobs today. It didn’t hurt job creation or business. Target followed. They also did it nationally, more jobs.”
Phillips then noted what I did earlier, that “of course, large businesses like Amazon and McDonald’s, for example, can and perhaps should pay more.” But what about “smaller businesses? How does this, in your view, affect mom-and-pop businesses who are just struggling to keep their doors open, keep workers on payroll right now?”
“Well, they shouldn’t be doing it by paying people low wages. We don’t want low-wage businesses. I think most successful small businesses can pair a fair wage. If you look at the minimum wage, it increased worker productivity until 1968, and that relationship was severed. If workers are actually getting paid more for the value they were creating, it would be up to $23.”
He added, “I love small businesses, I’m all for it, but I don’t want small businesses that are underpaying employees. It’s fair for people to be making what they’re producing, and I think $15 is very reasonable in this county.”
Now, to be certain, he has a few good points.
Yes, workers in America, as I said before, deserve more. And yes, more wages would no doubt increase productivity in most companies. I think most company owners would pay their employees more if they could – that is, if they actually care about the company and not just the potential money it could make them.
But Khanna fails to understand what $15 an hour looks like to most small businesses in America. Suddenly, they have to spend more than double on their payroll, while most other business expenses stay the same. Unlike Target or Amazon, what they cut is not creating new stores or moves of growth. Instead, they have to cut hours or employees completely.
And then where are those employees left? Instead of making a meager or low minimum wage, they now make nothing at all. And if the entire business goes under, as Khanna suggests, should happen if they can’t handle it? Well, then the community as a whole is affected.
Khanna doesn’t seem to know much about what we really need for someone who’s supposed to be working for America.