There’s big news recently of a movement across the country called “Fight for 15” which aims to get the minimum wage raised to $15/hour. As a small business owner, I’ve got a number of reasons that this idea is ludicrous and a mountain of opinions on better ideas. In this post, I’d like to just focus on one very simple reason (out of soooo many) that $15/hour is a horrible idea.
Let’s start by looking at what businesses are utilizing the minimum wage most. I would suspect those businesses are fast food restaurants, convenient stores, and other service based businesses where there are lots of individual workers serving walk-in customers. Are there exceptions? Of course, but we can’t make rules/policies based on acceptions. That’s just silly!
So these businesses fit into two categories, large corporately run businesses and small privately owned businesses. So if these large corporate businesses are paying people minimum wage (no matter their motive) that means that they are trying to spend as little as possible on their help. So if the minimum wage is basically doubled is it within the realm of possibility that they’ll find some other way to save that money?
Don’t you think they’ll move to more automated systems? Replace people with technology? Consolidate their location? All of these result in fewer jobs, but these large corporate businesses will survive. They’ll find a way to cut costs and usually that involves cutting people.
Now, let’s think about the other category, the locally owned small business. These are the businesses that are much more likely to know their employees personally. These are the businesses that are more likely to value their employees and want to move them up on the pay scale. These are also the businesses that are less likely to be hoarding cash.
Do you think these small businesses will be able to survive doubling the cost of their workforce? Have you thought about how many coffees someone has to serve in an hour to have a business make a profit while paying someone $15/hour? I have.
While McDonalds and Walmart would surely survive a doubling of the minimum wage (probably by letting go a huge amount of workers.) I know many small businesses that would have to just close their doors. The businesses are the ones that will really be hurt and these are the ones that have a heart for their local communities.
It’s ironic that the people pushing for $15/hour minimum wage are the same ones who are against these giant corporations…but these corporations are the only ones who will survive such an action. The little guy, like me, will be squashed.