<\/p>\n
Okay, say I’m a small business owner with 20 employees.\u00a0 5 of them have been with me since the start up and are making, say, $14.00 hourly.\u00a0 Not a lot of money to be sure, but nothing to sneeze at.\u00a0 Another 5 have been with me for 3 years are in the $11 range.\u00a0 The rest are new, less than a year and make either minimum wage or just above it.\u00a0 The federal minimum wage is $7.25 an hour though many states have minimums higher than that.\u00a0 Here is where the math starts so if you are not careful, your eyes will glaze over.\u00a0 But here is also where the liberal mindset of a “living wage” starts to impede on small business–the engine of our country’s economy.<\/p>\n
Minimum wage times 40 hours is $290. Times 10 employees is $2900 a week.\u00a0 That is just the newer, lower half of my labor force.\u00a0 The long timers earn $560 per week.\u00a0 Five of them:\u00a0 $2800.\u00a0 The middle earners, using $11 as a benchmark earn $440 each per week, or $2200.\u00a0 So, my business has to earn $7900 weekly just to make payroll.\u00a0 That is almost $95,000 annually in sales just to make payroll.<\/p>\n
I\u2019m not really a business owner so I don\u2019t know all of the intricacies of paying the bills for one.\u00a0 I have a friend who owned a book store.\u00a0 His roughly 1200 square foot place ran him perhaps $2000 a month in rent.\u00a0 Ching!\u00a0 Another $24,000 in sales just to break even.\u00a0 Now I\u2019m at $119,000.\u00a0 Add in utilities, and internet (since all businesses have to be able to go online), estimate $375 a month.\u00a0 Another $4500 a year, and we\u2019re at $123,500.<\/p>\n
I could go on and on.\u00a0 So let\u2019s just say I need $140,000 in sales just to get to the starting line.\u00a0 No profits are calculated to reinvest\/grow the business and no salary for me, the business owner.<\/p>\n
However, if you take out the people who are in the food service industry (they earn tips of which they claim only a portion of) and retail (some of whom make commissions), there are really only 1.5% of the labor force that earns the minimum wage.\u00a0 Most of these people are below the age of 24 and are usually students or in a trainee position.\u00a0 People learning a job should not expect $60K a year.<\/p>\n
Now, the government wants to raise the minimum wage to $10.10 per hour.\u00a0 It is required if you have a government contract, but that is their target for everyone.\u00a0 It presents quite a dilemma for the owner.\u00a0 I have 5 people who have worked for me for three years and have earned their way up from minimum wage (which was probably lower when they started).\u00a0 Now, by mandate, I have to pay the newest 10 people almost as much as they make.\u00a0 The 5 middle earners are going to want a raise too.\u00a0 The top 5 wage earners are going to take notice too.<\/p>\n
My choices:<\/p>\n
Absorb the costs.\u00a0 No serious business owner is going to do this for long.\u00a0 Let\u2019s examine this realistically.\u00a0 Once $10.10 is approved, they\u2019ll go for $12.00 an hour, then $14.<\/p>\n
Raise prices.\u00a0 This is the simplest way but also the most dangerous.\u00a0 I may raise prices beyond the acceptable threshold of my customer base and lose business.<\/p>\n
Lay off workers to compensate.\u00a0 This is one of the ways many business owners are fighting wage battles as well as Obamacare budget crunches.\u00a0 The raise to $10.10 from the current minimum of $7.25 is $2.85 per hour.\u00a0 Times 40 per week is $114.\u00a0 Time 10 employees is $1140.\u00a0 Times twelve months of the year is $13680 annually more I have to pay in labor costs\u2014the easiest controllable expense to manage.\u00a0 One minimum wage worker makes $15080 annually.\u00a0 So, if I layoff one worker I almost break even\u2014except for the added cost I\u2019ll have to endure to give everyone a similar wage increase.<\/p>\n
Reduce hours across the board.\u00a0 In this age of shared sacrifice, reducing everyone\u2019s hours is what many in the government would say is most fair. \u00a0It\u2019s a stupid and invalid argument.\u00a0 Why should my best and longest serving workers have to work less time, make less money so that the lowest earning among them make more?\u00a0 The government says I\u2019m liberating the worker from having to work a full 40-hour week.\u00a0 Yes, liberating them to go find another job at 40 hours per week so that I lose their experience and drain the brain pool.<\/p>\n
Close the business.\u00a0 If I\u2019m underwater, this could be a viable option.\u00a0 Shut it down and liberate my team to go find other work.<\/p>\n
Sell the business.\u00a0 Also a viable option.\u00a0 The government is so rabidly anti small business, one would be crazy to try to do a start up.<\/p>\n
Liberals in Washington just see the first stage when they propose legislation like this.\u00a0 They only see that they think they are helping the working man by providing them with higher wages.\u00a0 They do not see the ripple effect in the rest of the pond from the pebble they dropped in.\u00a0 Or if they do see it, they do not care.<\/p>\n
Maybe we should treat them all as a small business.\u00a0 They have to pay their staff out of their own salary budget.\u00a0 Every time a federal wage increase happens or they want to hire a new page, they have to figure out how to pay for it from their own salary base.\u00a0 Ah, but that would be too much like making them live in a world of reality.<\/p>\n","protected":false},"excerpt":{"rendered":"
Okay, say I’m a small business owner with 20 employees.\u00a0 5 of them have been with me since the start up and are making, say, $14.00 hourly.\u00a0 Not a lot of money to be sure, but nothing to sneeze at.\u00a0 Another 5 have been with me for 3 years are in the $11 range.\u00a0 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/writeofcenter.net\/index.php?rest_route=\/wp\/v2\/posts\/40"}],"collection":[{"href":"https:\/\/writeofcenter.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/writeofcenter.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/writeofcenter.net\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/writeofcenter.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=40"}],"version-history":[{"count":1,"href":"https:\/\/writeofcenter.net\/index.php?rest_route=\/wp\/v2\/posts\/40\/revisions"}],"predecessor-version":[{"id":41,"href":"https:\/\/writeofcenter.net\/index.php?rest_route=\/wp\/v2\/posts\/40\/revisions\/41"}],"wp:attachment":[{"href":"https:\/\/writeofcenter.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=40"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/writeofcenter.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=40"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/writeofcenter.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=40"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}