Giving Away Someone Else’s Money

Does anyone else find it funny and disturbing that when Progressives want to give people money, it always comes out of someone else’s pocket? Example, the federal minimum wage is now $7.25. Obama, during his “grand” State of the Union says it should be $9.00 an hour. Who could possibly be against that, right? I mean, isn’t it good that people are guaranteed $1.75 more an hour for working? Well, it’s great if you aren’t the business owner who now has to pay that.

Let’s look at how business works. First, you have to understand that the “minimum wage” is the wage that a business man will have to pay ENTRY LEVEL employees. These are employees who just started working for a business. That means that they are probably doing the lowest level of work in the business. They are probably not highly skilled and may not have a degree or certfication in anything. So, if an employer has ten employees and three of them are entry level, the other seven are not. They may have more skilled posititions, have been working their longer, etc. Let’s say that, up to this point these other seven employees have been there long enough that they are earning $8.00 an hour, .75 more an hour than the current minimum wage.

Along comes the new minimum wage, which the employer has to pay the three new employees. Now, he can’t pay them $9.00 an hour and leave his others at $8.00. He also can’t just give them $9.00 an hour because they have been working their long enough to earn raises. So now he has to bump their pay to $9.75 an hour.

What’s wrong with that, you say. Everyone gets more! YAY! Well, here’s the thing. Let’s consider that the employer was paying $8.00 an hour for these employees. Without any other benefits, he is paying $2200 a week for those seven employees.  He is paying $870 a week for the other three. That’s a total of $3070 a week for his work force ( not including himself) which equals $12280 a month for salaries.

Now, let’s institute the minimum wage. For the seven employees who have been there a while he now has to pay $9.75 an hour.  He is now paying $3900 a week for those ten employees, and for the $9.00 an hour employees ( 3 of them) $1080. That’s $4980 a week times four which is $19920.  Almost $7000 a month more.

You still think it’s fine. “Whatever,” you say, ” At least these people will be making more money and that’s good!”

If you have ever owned a business you know that you are in business to make money. That IS the bottom line, like it or not. That business owner, who probably works 60 -80 hours a week because that’s what you do when you own a business, needs to make a certain profit in order to have incentive to stay in business.  Now, we have cut into the business profit by an additional $7000 a month. Where do you think this will come from?

The business owner HAS to do something to change the bottom line. He can either reduce his profits, reduce his number of employees, or raise his prices.  Let’s look at each of these. Businesses NEED to make profit to stay in business. These profits are what keeps a business alive. They provide money to invest back in the business. They are what allows the business owner to pay his bills, feed his family, etc. Yeah, I know, you don’t care about him. But guess what? If that doesn’t happen, he decides it’s not worth it, goes out of business and then everyone is out. So, cutting his profits are not the option.

He can also reduce the number of employees. Maybe he doesn’t hire the three entry level employees. Maybe he has to let people go. How does that help anyone? Aren’t we already in a situation in this country where we have 7.8% unemployment?

Finally, he can raise his prices. So, instead of losing money, he increases his prices to cover the increased cost for the new minimum wage. Now his customer suffers that increase. Maybe the business customer base shrinks because of the increase and we are back to either cutting staff because of less business or going out of business. Let’s not even consider the inflation this causes.

But, Progressives don’t get that scenario.  After all, evil business owners are screwing the working people, right? That business owner, he needs to suck it up because he exists for the purpose of the worker, right?

The bottom line is that people who have never run a business don’t know this and don’t give a damn about it. They just want someone else’s money. Right now. Pay your fair share…..yeah, right.

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