The Arbitrary Minimum Wage Is an Assault on Small Business

via rushlimbaugh:

RUSH: A question, ladies and gentlemen. How many millions of jobs will be lost if the Democrats raise the national minimum wage to $15 an hour? The national, a federal minimum wage. Not state. Not neighborhood. Not city. Not local. Federal minimum wage. Because back on Tuesday, the Democrats introduced a bill that would raise the minimum wage nationally to $15 an hour over five years.

It would more than double the current minimum wage of $7.25 an hour. It’s called the Raise the Wage Act. Oh, it’s so simple. “Rage the Ways Act.” Sorry. I said, “Rage the Ways.” Raise the Wage Act. It would increase pay from $9.50 an hour in 2021 to $11 in 2022, and in 2023 it would rise to $12.50 an hour. It would hit 14 bucks an hour in ’24.

It wouldn’t be until 2025 that it hit 15 bucks an hour. Do you know how many jobs would be lost? This is guaranteed to be true, by the way. This is not speculation. It’s not conservative theory. We have enough data with the imposition of the minimum wage in various states and cities, various local levels. We know what happens with the implementation of a minimum wage.

The number of jobs that will be lost would be at least 1.3 million, according to the Congressional Budget Office. Which means that members of Congress are okay with it! They’re gonna move ahead with the legislation anyway, even though their own budget office says you’re gonna cost the country 1.3 million jobs. The truth is it’s gonna be higher than that.

Most economists who are not socialists think the number will be much higher. Now, I have attempted over the 30 years of this program to explain the minimum wage and why it’s a bogus proposition countless times, and I’m going to do it again. I have found over the course of my hosting the program that the minimum wage is something that a lot of people are just sympathetic to, the way it’s presented to them.

“Well, you can’t feed a family of four on $15 an hour! (sputtering)” Well, why isn’t it higher than that? This is the question I always ask. What is the minimum wage? The minimum wage is an arbitrary amount of money that business owners, the majority of whom are small business owners, will be required by federal law that they have to pay, whether the people they hire are worth it or not.

The reason the minimum wage costs jobs is because if the business — small business — currently is paying people entry-level at eight bucks an hour, and all of a sudden they’re told they have to pay ’em 10, well, they don’t have the money laying around in a vault that they’re not using. But a lot of people think that if you are a business, that you’re a millionaire.

(sniveling) “If you’re a business, you’ve got all kinds of money that you’re not spending. You’re hoarding it, and you’re keeping it for yourself rather than giving it to other people and your employees because you’re a cheat, because you’re selfish.” Such is the damage to the image and reputation of businesspeople that the left has succeeded in creating.

So what has to happen in the real world? Business owners have to let employees go, they have to fire them, because they don’t have an endless pile of money that they could be paying people with but aren’t. Most small businesses have very small margins. They’re not just barely getting by, but it’s not… They’re not a bunch of hedge funders. Let’s put it this way.

But the real problem is it’s an arbitrary number that is mandated on them. It has no relationship to the business that they’re in. It has no relationship to their profit and loss. It has no relationship whatsoever to the business they’re in, what the costs of doing business are, what the current profit margins are. They just slap on an arbitrary figure that has nothing to do with market conditions.

And the arbitrary figure is one that is created by politicians that they can get behind as compassionate and understanding and say they care about people. People end up losing their jobs because of the minimum wage. It’s much easier to trim your workforce than it is to go out and somehow make people more productive — and making people more productive is how you end up being able to pay them more.

It’s your business growing!

But the arbitrary minimum wage is a direct assault on small business growth, which is the primary bottom line to why it’s just a guaranteed failure. It’s been tried. It’s been proven over and over again. It doesn’t matter. This is the Democrats using their power when they have it, and the purpose of this is to create failures in small businesses, to run them out of business, to make sure that they have all kinds of trouble making their ends meet.

You might ask, “Well, why would anybody want to do that?” Because it will turn them into dependents on the government, folks. It always circles back to that. In addition, the nationalization of a $15 an hour minimum wage — which, again, will not hit until 2025. If $15 an hour is what’s needed, why not do it this year? Why have to wait ’til 2025? And if $15 an hour is good, why not $20?

You know, try an experiment with somebody. This always works. Talk to somebody who’s in favor of the minimum wage. You won’t have any trouble finding people. They’ve been brainwashed on this for a number of years. And keep asking them, “Okay, well, if 15 bucks an hour is good, why not 20?” And they’ll agree with you. “Oh, yeah, I could go for that,” and just keep bumping it up.

“Okay, you like $20. What about $25 an hour?” and they’ll agree with you. At some point when you keep bumping up the number, you’ll reach a number where they will say, “No, no, no, no, no. We can’t do that.” It may be 35 an hour, it may be 25, it may be whatever. But you’ll reach a point where the person you’re talking to who loves the minimum wage will tell you, “No, no, no, that’s too much.”

At that point, you pounce, and you say, “Why? Why is 35 too much when 30 isn’t? Why is $35 too much when $25 isn’t?” and they will not have an answer for you. Some will, actually, and the answer they have will make your point. “Well, I mean that’s just too much to mandate that somebody be paid for that before you know whether they’re worth.”

A-ha!

“Well, why did it take $35 to get you to realize that? Why didn’t you realize that at $25? Why didn’t you realize that at $15 or $20?” The point is, you’re not really arguing with them that a specific number. The reason you’re doing this exercise is to get them to finally react at whatever number, that it’s not right to put that kind of a burden on business.

At that point, you’ve won the argument. Here’s what else it does, though. It destroys youth and minority employment, because the minimum wage is not designed to support a family of four. (chuckling) There is no way. It never has been. It’s entry-level. It’s designed to pay people that don’t have any experience doing the job. What it does, is it wipes out entry-level jobs, and that’s what people that have never done work before need.

They need entry-level jobs to learn how to survive in the work culture. They need to learn how to show up and to show up on time. They need to learn how to follow directions. They need to learn how to engage in productive behavior. They need to learn the satisfaction of doing a job well.

That’s what the whole point of entry-level work is. Entry-level work is not designed to support a family. You weren’t ready to support a family when you were 16 or 17. You left home; you wanted to go get a job. You weren’t capable of it. You had to learn the work culture. That’s what entry-level work is all about.

But of course, wiping out entry-level positions, destroying minority employment? That’s kind of the plan, isn’t it? It just forces businesses to move to automation. That’s what’s gonna happen. Businesses are eventually gonna say: You know what? I can’t deal with this hassle.

I can’t deal with you people telling me how much I have to pay people when you don’t even know what the work is. You don’t even understand what I do in my business, and I’m not gonna put up with that. I’m gonna try automate as much of this work as I can. Andrew Yang, of all people, has laid this all out. They want to destroy jobs. Why would they want to do that? That’s a tough thing to say, Rush. No, it’s not. They want to destroy jobs by replacing as many as they can with automation. Why?

Well, that’s how Andrew Yang believes that he can get his universal basic income of a thousand dollars a month passed into the law, when people do not have any job, when they don’t have work to do, when they don’t have a job to go to, they still need money. They still need food. They still need to pay the bills. Hey, I got an idea. How about a guaranteed universal income, $1,000 a month, universal, basic income. Not to mention this will wipe out a lot of restaurants who managed to make it through 2020 still alive. And they’re gonna raise taxes in the midst of this? They’re a gonna raise taxes while they are raising the minimum wage? I don’t know, folks.

BREAK TRANSCRIPT

RUSH: Fort Worth, Texas. This is Laurie. Great to have you. Hello.

CALLER: How are you?

RUSH: Good. Thank you.

CALLER: I had to call in. I dialed a thousand times because as a small business owner it isn’t just the effect of the employee, the bottom line employee or the entry-level employee losing their jobs. What people have to understand if they’re way past entry-level and they think, well, this doesn’t apply to me, is that the cost of absolutely every single thing they put in their grocery cart, every single thing they buy will skyrocket. And then you also have employees that have worked for years for you that are loyal employees that may be being paid 10, 12, $15 an hour, and you also have to raise them a commensurate amount. And so it just absolutely skyrockets the cost of everything that you buy.

RUSH: Well, if you take on new employees, that’s true, you do have to raise the compensation for existing employees. But isn’t it true that what you normally do, the easiest thing to do is just, for lack of a better word, you fire people in order to maintain what your cost of doing labor, your labor costs are, that’s what your primary outgo flow is, and you’ve gotta maintain that, you know what that is, you want to be able to calculate that for as long as you can. Labor costs are the number one expense you’ve got and so it’s easier just to let people go.

CALLER: Well, except that it harms your productivity because then you’re stretching all these other employees to cover what was being done by entry-level positions. You’re having them having to either pay them much more because they’re making more hours or they’re doing other jobs, and so it affects everything all the way around. It is not just an entry-level position. And as somebody that has employed entry-level position people, it takes a long time to get them trained to do, as you said, the culture of business.

RUSH: Right. And by the way, with the Biden administration, we’re gonna do all this while importing the Third World in via the southern border?

CALLER: Yes.

RUSH: I mean, how much sense does this make?

CALLER: None.

RUSH: Exactly right. Zip, zero, nada.

CALLER: Thank you, Rush, for all you do.

RUSH: I’m glad you called. Really, it’s a great addition to the point. It’s not very often a caller is able to add additional, salient points to any issue discussed by me, The Big Voice on the Right. But Laurie here did it.

BREAK TRANSCRIPT

RUSH: Don in Detroit, you’re next, Open Line Friday. Hi.

CALLER: Hello, Rush. What a pleasure this is. I’ve been listening to you since 1988. I recently even got my mom to finally see the light. She’s from South America and finally was wondering who this entertaining guy was on the radio one day. One day I tricked her, and I said, “Oh, it’s the guy you hate. Rush Limbaugh.”

RUSH: Oh, way to go.

CALLER: (laughing)

RUSH: Only took 31 years.

CALLER: You’ve got it. It did. It was a long whatever. But I tricked her on the radio, and she says, “That man is so entertaining!”

RUSH: Isn’t that great?

CALLER: She was laughing.

RUSH: That’s a beautiful thing. Thank you very much.

CALLER: Anyways, I’ll get to the point here. I got so many. But I heard you taking about the $15 an hour minimum wage, and I wanted to talk about construction — I’m a contractor here — and how tough it is all these burdens that are placed on the employer. At $15 an hour, my experience is whether… You know, I’m talking even entry-level.

Like, you were saying, like, maybe, laborers and so forth. I don’t care if it’s $10 an hour or if you give them 15, ’cause they got you by the whatever. It’s the middle of the summer and you just need warm bodies to keep the projects going. If you pay ’em $20 an hour or $15, I still get the same output.

I still got the same employee that comes in with the $1000 iPhone. They got… They call ’em “sleeves.” They got tattoos on both arms, and that costs a fortune. They’re 20-some years old, grown adults, still living in the mom’s basement. That’s true. All of them make fun about that, but it’s true. It’s true.

RUSH: I know it’s true, and you got a great point. You’re basically saying no matter what you pay ’em, you still get the same productivity out of them which is not much.

CALLER: The same thing — or you’ll get the older guys; they’re crying about their no-name diapers and the friend of the court. But they’re smoking brand name cigarettes and they got the same ones too with a $1000 iPhones and everything. None of them have a work ethic, and the burden’s on me.

Just basic, basic math computation, teaching a guy how to read a tape measure or hold a grading stick. You know, we did a lot of excavating, grading work and so on. And, you know, the new guys will fly like an eagle for a week, 10 days, and then it’s the same thing. I become the loan shark, the camp counselor, the bail bondsman.

I’m a psychologist. I can’t tell you how many times I take… You know, I get pirates, and I got to try and turn ’em into choirboys here. It’s young, old. (sigh) The young ones, they can’t handle the heat anymore. (whispering) “You gotta watch how you talk to ’em. I gotta talk so soft,” or whatever. I’ll have a mom call me up and tell me I need to learn how to talk to her adult “child,” because, you know, he was late for work.

RUSH: Wait a minute!

CALLER: (laughing)

RUSH: You had a mother call you and tell you you need to learn how to talk to her adult child?

CALLER: He was 24 years old, Rush, living in the basement, and he’s 3-1/2 hours late to work for doing a swimming pool. We need just warm bodies, guys to kick around gravel.

RUSH: And what are you paying this guy?

CALLER: Let’s see. At that time, it was $14 an hour to start. That was two years ago, and his mom called.

RUSH: Out of all the things you said, you would have to sit there and your phone rings and it’s the mother of one of these guys living in her basement, and she is complaining to you — she b-i-itching at you — about the way you’re talking to her son?

 

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