Letter: Higher wages help small business
It’s hard to know where to start pointing out the logic errors in Stan Rachesky’s latest pontification.
Stan wondered where to find an additional $41,600 from his business to cover the added expense of a minimum wage rising to a hypothetical $10/hour Considering that his business was large enough to employ 14 full time people, the logical place to find that money would be in his before tax revenues. Stan believes that the $41,600 coming out of his pocket would apparently take his business under. Reality check: If an entrepreneur with a business employing 14 full time employees had an unplanned $41,000 expense that managed to sink their company, they deserve to go under. What is the real reason? Greed.
We, too, are small businessmen, employing eight employees. We start our lowest paid workers at $10/hour, giving them regular raises all the way to $18/hour, as they demonstrate progress. Sure, we could start them all at current legal minimum wage, and take home a bit more for ourselves, but for what purpose? Are we going to be able to spend that additional money? No. We’d be buying down our mortgages, or investing in the stock market. That money would NOT be injected back into the economy.
The same money in the hands of our employees IS spent, increasing the demand for goods and services, increasing the demand for workers to create those goods and services, pulling more people off unemployment and welfare rolls, producing more tax revenue, etc.
Sadly, Stan thinks he was “supporting” 40 people (10 families of four) on an annual family salary of just $16,640, which is 30 percent under the federal definition of poverty. Stan opines that raising the federal minimum wage to $10/hour would have necessitated his releasing two employees, whose families would have to use public assistance. Get real: The 10 families he is “supporting” on his paltry $8/hour are already using those subsidies to survive.
Addressing income inequality starts even with small businesses, not just the Walmarts, McDonald’s, and GEs of the world.
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