$15 Minimum Wage = Small Business Death Sentence
Recently some cities have enacted a $15.00 per hour minimum wage piggy backing on the president signing a $10.10 minimum wage order for federal “vendors.” Not employees, just “vendors.” The cities decided they knew better and dealt a death blow to an already fragile economy. Many small businesses, and fast food and hospitality-based businesses need inexpensive workers to ensure they keep costs down on food and services that otherwise most Americans wouldn’t buy. That’s right. Americans want bargains. They don’t want $12 hamburgers and a $14 rootie-tuttie pancake plate, or a $150 a night Motel 6 room.
Most of those screaming about the minimum wage are those who A.) will eventually get dues from it (read: union) or B.) think the world revolves around them and that they should get $15.00/hour for making my “½ caff, decafe, macchiato over sugared” coffee incorrectly. But that’s not the point. The point is that, most of the businesses targeted here are franchise business; Subways, IHOPs, and McDonalds, just to name a few.
Franchises make very little money until you own several of them. Franchise owners are mom and pop stores where they mortgage their homes, spend their savings, and, usually, are the last to take a paycheck to ensure everyone else gets paid first.
Now, let me pause to say to those of you who are going to email or write me about how much these businesses are making. If you’ve never have had a business yourself (with multiple employees), I will say, in the immortal words of Archie Bunker, “stifle it,” and in my words, “go pound sand,” you have no more standing than someone who doesn’t vote complaining about our leaders.
If you think that raising the minimum wage from $8.00 plus per hour to $15.00 per hour won’t affect mom and pop you have a counting problem. Businesses figure out how many people they need to run the business and turn a profit. Let’s say the number is 10. You almost double wages by raising to $15.00/hour. That means on paper it’s like doubling the workforce (without the increased manpower), yet the business has already determined that they can’t afford that many employees. The bottom line is, some workers will have to go! It’s bad enough that most jobs created these days are part-time simply because most businesses can’t afford Obamacare and are uncertain of the economy. So we end up with more lost jobs.
On what planet does that make sense? And what about the stores that are on the outskirts of those cities implementing the increase? Do you think many will drive an extra few miles to pay less for a hamburger or gas or services, especially in today’s economy? Yes, of course they will! So how is that going to help the already struggling businesses who are now mandated the $15.00/hour minimum wage? It won’t!
In my area we have had several restaurants shutdown due to a lack of traffic to keep them open, even though they were always packed, with a waiting line! Eating establishments are giving out coupons by the truckload, buy one get one, get a free dessert, Tuesdays kids eat free. These are loss leaders hoping people will come in and buy more booze or items not on special. Guess what? When people are hurting free is all they can afford.
In Seattle the airport has already raised its minimum wage to $15.00/hour. It’s going into effect January 1st, 2015. Employees are already looking at how to spend it. Yes, that $8.00 beer will now cost you $12.00 and that Pizza Hut Mini $12.00 pizza will now cost you $18.00. Great! And now, airport vendors say they are looking for ways to cut employees! More unemployed. Good job Mr. Obama. The only jobs you seem to be creating are the ones at the Unemployment Offices to handle the influx of people. Thanks.
Read the rest at http://therealside.com/2014/06/15-minimum-wage-small-business-death-sentence/#7AXG16UlAXjOdoH8.99