Here's another lie
we'd like to put to rest once and for all; the one about the
minimum wage hurting small businesses.
The "conventional wisdom" seems to be going like this: small businesses are being hit hard by this minimum wage increase, especially during a recession, because they can't afford to pay more.
This is an absolute
crock, even on the rare case when the minimum wage increases during a
recession. In fact, it's even more of a crock during a recession.
Sure, many small
businesses are hurting. But they're hurting because of a lack of customers,
more than anything, not because wages are too high. If they have five employees
working 40 hours per week, and all of them are making minimum wage, they're
cheapskates in the first place. And the added cost to their business is about
$32 per worker, including taxes, or $160 per week.If they can't handle that much of an increase, even during a recession, perhaps their business is doomed, anyway. And how good is it to the economy to have an abundance of small businesses that aren't making any money, anyway?
Of course, at the
same time they're seeing an increase in expenses of about $32 per worker, all of their competition is doing the same.
So, they're not at a great disadvantage, compared with the competition, except competition that pays more and hires better workers.
But here's the part
that minimum wage detractors forget. While that small business owner has a small number of employees each
getting a $28 raise, there are thousands of other people in the area who are
also getting a raise. Each of them has and extra $25 or so per week to spend,
which means more available money to be spent in small businesses.
What's funny is, the
same people who touted the Bush tax cuts as an economic stimulant. They were also the ones who thought that
giving the middle class a few hundred extra dollars would get the economy
I'd like for these
geniuses to explain how giving a few hundred extremely rich folks a few
thousand dollars in tax savings, and giving middle class families $600 one time
only stimulates the economy, but giving millions of consumers $100 more
spending money per month is somehow detrimental.
Come on, guys… let me in on this little secret… in what way is giving more people more money
to spend bad for the economy… I'd love to hear it…