Small businesses know a minimum wage hike is a guaranteed job killer. Congress’s own Congressional Budget Office says a $15 minimum wage would lead to 1.4 million jobs lost. The consequences could actually be worse: In 2019, the NFIB Research Center found that a federal $15 minimum wage would kill 1.6 million jobs. More than 55% of the job losses would be at small businesses, and nearly 45% would be at the smallest firms.
Small business owners care about their employees. Employees are like family, and owners want to help them get ahead. But requiring small businesses to pay a wage they cannot afford is dangerous. That money has to come from somewhere, and on top of lost jobs and fewer hours, there would be less small business support for sponsorships, school music programs and local charity drives. For some small businesses, a more than doubling of labor costs would force them to shut down — a blow to Main Streets across the country.
The damage would be even greater after the financial difficulties created by the pandemic. Small businesses have been disproportionately harmed by one-size-fits-all government lockdowns. Hundreds of thousands have already closed forever. Those that have survived to this point are planning for difficult economic conditions in 2021. Mandy King, an NFIB member who runs a childcare center in Colorado recently summed up small businesses’ fear of a minimum wage hike: “Please don’t make it harder than it already is for small businesses like mine to stay open... there’s only so much we can take!”
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The story is different for big business. Many large corporations have done comparatively well during the pandemic — see companies like Amazon, Walmart, Target, and many more. Most had the resources to quickly adapt to lockdown life, while some had business models primed for success when families were forced to stay home. Amazon, for instance, made more profit in the first nine months of 2020 than it did in all of 2019. Contrast that number to the devastation in the small business economy.
Big corporations can afford a wage hike, small businesses just can't Along with big business lobbying groups, many of these same companies are now actively supporting a minimum wage hike, or at least not opposing it. No wonder: They have the revenues and the scale to absorb a more than 100% increase in the federal wage floor. They also have more options to offset higher costs with layoffs, benefit cuts, and technology.
A lot of big businesses have already raised their minimum wage to $15. Amazon made this move in 2018, while companies like Target and Walmart have followed suit. Not only would a $15 federally mandated minimum wage not hurt them, it would crush some of their small business competitors. The path would be clear for even more market dominance of big businesses and Wall Street, gained at the expense of Main Street.
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Is that really what Congress and the White House want? Small business is ready to lead America out from the terrible economic damage of the pandemic. Since the last economic crisis ended in 2009, small businesses have accounted for over 65% of net new private-sector job creation, and they employ nearly half of all private sector workers. Now is the time to build on that record, not stifle job growth where it is needed most. On the minimum wage, policymakers should listen to the small businesses that have the most to lose.
I wonder if businesses can just go to ‘commission only’. Give the cashier 5% per hour of all sales.
or, everyone is a contractor now. 1099 for you, 1099 for you, everyone gets a 1099.
The side benefit is now everyone can write off everything on taxes. Mileage, clothes, tools, etc.
Of course everyone would have to get obamacare.
Tax prep would be more expensive, but hey at least you're working.
The minimum should be returned to $0.00 That would be the free market way.
As long as you're not talking about slavery.
minimum wage is pointless other than to damage small business.
When the minimum wage goes up a lot, everyone's wage has to rise accordingly. Say someone has a high stress job making 15/hr and trivial work is at 10. Suddenly minimum wage is 15. So who will want to work hard at 15 when they can do trivial work at 15 too?
So shop labor is now 15, when it was 10. Office work was 20, now office will want a 50% raise too.
Eventually everyone gets a 50% raise, suddenly labor costs go up 50%.
Raw materials costs will eventually go up too, because the companies that produce raw materials have higher labor costs.
So, raise minimum wage 50%, everything just got 50% more expensive.
NOTHING CHANGES.
EXCEPT!
Places like walmart and lowes can DELAY raising their prices for a little bit. This is the rub. The big boxstores can DELAY the raising of prices while small businesses cannot.
This will DESTROY all small business, leaving ONLY big business.
OK opposite point of view here. Please actually read it instead of just being like "minimum wage bad."
Can only speak for UK and EU but we have had minimum wage laws since forever and it works. It stops evil companies exploiting their workers into the ground. If they could force people to work for free then they really would, but minimum wage stops that.
Big legal case recently about are Uber drivers independent contractors or are they "workers" which is a specific legal term meaning they get minimum wage and paid holidays. The court decided yes they are workers, suddenly Uber has enough drivers.
Also it avoids the crazy US situation of workers being employed at 2 dollars per hour. Yes really, if your drink costs 5 then 5 is what you pay instead of the wait staff harassing you out the door for "tips" because they are desperate to make enough to live on.