Small businesses bore the brunt of the economic hardship of the COVID-19 pandemic. Lager retail establishments were deemed essential. Their online presence served as a respite for consumers sheltering in their bubbles. But mom and pop operations, for the most part, suffered tremendously. The PPP program helped with some payroll and helped keep the lights on for many, but it has been an awful year. For those who survived, the future is far from certain.
The absolute worst thing the government could do to these small businesses is raise the mandated minimum wage.
But it is so easy to spend other people’s money.
“They deserve a raise!” “These fat cats can afford it!” “No one can be expected to raise a family on the minimum wage!” “If you work full time you shouldn’t be below the poverty level.”
It’s so easy to spend other people’s money.
The minimum wage is for entry level jobs that don’t require a specialized skill. They are clearly not family supporting jobs and never were meant to be. I am still waiting for an example of someone who started at a job at the minimum wage and remains at that job, at that wage, five years later.
Like most people reading this Op-Ed, my first official job (not including mowing lawns, shoveling snow, etc), paid the minimum wage. After four months, I received my first raise. By the time I left that fast food job three years later, I was making almost a dollar an hour more than the minimum. While there, I displayed and cultivated the traits that showed my employer I had value above the minimum wage. This same process happens across the economy in every single sector, every single day.
Even post-pandemic, the unemployment level is at near historic low levels. No one is stuck in a minimum wage job for any period of time unless they choose to be, or unless they are unaware they have a choice to find employment elsewhere.
The big box stores who didn’t close during the pandemic already pay way above the minimum wage, by the way. So a minimum wage pay hike isn’t ‘sticking it to the fat cats.’ Costco and Walmart and even Amazon are now, as you read this, competing for labor by increasing wages. It didn’t take a government mandate to make that happen. Competition for labor increases its value.
According to the Bureau of Labor Statistics, most workers’ wages rose a bit more than 10% from December of 2016 through December of 2019. Those making the bottom 10% received a bigger raise, they saw their wages increase 15.6%. The pandemic surely stopped this momentum. But we’re rebounding. That is, unless the government interferes and chokes small business with a mandated wage hike.
Raising the minimum wage to $15 per hour will hurt the very people advocates for such a policy claim to care about. It will increase the costs of goods and services, it will force the closure of many small businesses and it will reduce employment opportunities for those starting in the workforce.
As of 2016, less than two percent of all hourly employees were paid at or less than the federally mandated minimum wage. But a minimum wage hike would raise the wages of everyone currently earning less than the new minimum. These workers are primarily in the leisure and hospitality industries.
The same people who are posting tweets and memes about saving the local bar restaurant or performing arts place are advancing a policy that will do something even a global pandemic couldn’t. It will force thousands of small, family-owned establishments out of business for good.
It’s so easy to spend other people’s money. It’s cheap compassion when other people have to face the consequences.
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This WTMJ Guest Op-Ed was written by:
Brian Fraley is the Owner of Edge Messaging, a communications consulting firm in Brookfield. A Milwaukee native, Fraley’s first job was at the old McDonald’s in the center of Mayfair mall–yes, the one with the ice rink.
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