The most recent economic numbers just came in from the Labor Department, and on paper it looks pretty good. The jobless rate just fell below under 4% for the first time since 2000; we’ve now had 91 months straight of job growth (thanks Obama). But the problem isn’t about the number of jobs out there: it’s about the ability to make ends meet.
Fifty years ago, the minimum wage was just over $10 per hour in today’s dollars. While it was still difficult to raise a family on that salary (a full time employee would make the equivalent of $21,000 a year), it was 19% more than today’s minimum wage in Florida of $8.25 per hour (where a full-time employee makes $17,160 a year). At that rate, a single parent with one child is under the poverty rate and qualifies for food stamps.
You Didn’t Build That
It seems like eons ago, but Obama got a lot of flak for telling business owners, “You didn’t build that.” But, to be honest, there’s a lot of truth to it.
As an entrepreneur, I can say with certainty that it’s a lot less romantic than it’s portrayed to be. The business I co-own with my wife is going on its 7 year anniversary in business, and we’re very fortunate to have made it this far. But the only reason we made it this far is that we have fantastic clients.
It’s no stretch to say that our clients built our business. If they didn’t trust us and didn’t come on board, we wouldn’t be here, period.
And without our clients, we wouldn’t have been able to build our team – a team that has done an amazing job taking care of our current clients, giving us more time to focus on sales and adding more clients to our roster. It’s no stretch to say that our team built our business too.
And that’s why paying a living wage is absolutely vital. If your team is worrying about survival, if they’re worrying about unpaid bills or something their children need that they can’t afford, then they aren’t worrying about your clients…which means your business will unravel quickly.
My job as a business owner is to make sure my team is taken care of, so that they can help take care of our business.
The Economic Argument For Raising the Minimum Wage
In effect, keeping the minimum wage so low just means that the government is subsidizing companies that pay their employees peanuts.
If we raised the minimum wage to $15 an hour, a full-time employee is making just over $32,000 a year. Not enough to be living like kings, but enough that the government shouldn’t need to be subsidizing them so that they can survive.
The added bonus: this jump will provide an economic boom. The best way to stimulate the economy is to get the poorest among us more money. The moment they do, they spend it on something they need that they’ve been going without.
Going back to who builds businesses: raising the minimum wage will create more customers for every business. It’s simple trickle-up economics.
The Republican Argument
I receive a great deal of pushback for fighting for a $15 an hour minimum wage. The GOP says it will cause inflation to spike, and companies like Taco Bell will lay off all of their staff because they won’t be able to afford them at $15 an hour.
The inflation spike is a red herring: the Federal Reserve has been trying to get inflation to spike for a decade to no avail precisely because those of us at the bottom of the economic ladder don’t have enough to make ends meet. Since the Reagan era, we’ve been focusing on the supply-side of the economy — but there’s also a demand side. By overemphasizing the supply over the demand, we have a skewed economy.
The potential massive layoffs at Taco Bell is also falsely claimed as we can see by looking at the income statement of Yum Brands (the company that owns Taco Bell). Even if raising wages to $15/hr raised their total operating expenses by 67% (it would be less because minimum wage salaries aren’t their only operating expense), it would only reduce their net income by 8%.
The bottom line is that businesses can afford it.
Let’s Bring Change to Tallahassee
Let’s get the job done. I’d love your support in the Democratic Primary on August 28th; help me get to Tallahassee so that we can stop subsidizing businesses that don’t want to pay their employees a living wage, give a boost to our economy and help grow our businesses.