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The Real Side | Commentary by Joe Messina
| Monday, Jun 23, 2014

joemessinamugRecently some cities have enacted a $15-per-hour minimum wage, piggybacking on the president signing a $10.10 minimum wage order for federal “vendors.” Not employees, just “vendors.” The cities decided they knew better and dealt a death blow to an already fragile economy.

Many small businesses and fast-food and hospitality-based businesses need inexpensive workers to ensure they keep costs down on food and services that otherwise most Americans wouldn’t buy.

That’s right. Americans want bargains. They don’t want $12 hamburgers and a $14 rutti-tutti pancake plate or a $150-per-night Motel 6 room.

Most of the people screaming about the minimum wage are those who 1) will eventually get dues from it (read: union); or 2) think the world revolves around them and that they should get $15 per hour for making my “half-caf decafe macchiato over sugared” coffee incorrectly. But that’s not the point. The point is that most of the businesses targeted here are franchise business: Subways, IHOPs and McDonalds, to name a few.

Franchises make little money until you own several of them. Franchise owners are mom-and-pop stores where they mortgage their homes, spend their savings and usually are the last to take a paycheck to ensure everyone else gets paid first.

Now, let me pause to say to those of you who are going to email or write me about how much these businesses are making. If you’ve never have had a business yourself (with multiple employees), I will say, in the immortal words of Archie Bunker, “Stifle it,” and in my words, “Go pound sand.” You have no more standing than someone who doesn’t vote, complaining about our leaders.

If you think raising the minimum wage from $8-plus per hour to $15 per hour won’t affect mom and pop, you have a counting problem.

Businesses figure out how many people they need to run the business and turn a profit. Let’s say the number is 10. You almost double wages by raising to $15 per hour. That means on paper it’s like doubling the workforce (without the increased manpower), yet the business has already determined it can’t afford that many employees. The bottom line is, some workers will have to go. It’s bad enough that most jobs created these days are part-time simply because most businesses can’t afford Obamacare and are uncertain of the economy. So we end up with more lost jobs.

On what planet does that make sense? And what about the stores that are on the outskirts of those cities implementing the increase? Do you think many will drive an extra few miles to pay less for a hamburger or gas or services, especially in today’s economy? Yes, of course they will. So how is that going to help the already struggling businesses that are now mandated the $15-per-hour minimum wage? It won’t.

In Santa Clarita, we have had several restaurants shut down due to a lack of traffic to keep them open, even though they were always packed, with a waiting line. Eating establishments are giving out coupons by the truckload: buy one, get one; get a free dessert; Tuesdays kids eat free. These are loss leaders, hoping people will come in and buy more booze or items not on special.

Guess what? When people are hurting, free is all they can afford.

In Seattle, the airport has already raised its minimum wage to $15 per hour. It’s going into effect Jan. 1. Employees are already looking at how to spend it. Yes, that $8 beer will now cost you $12, and that Pizza Hut Mini $12 pizza will now cost you $18. Great. And now, airport vendors say they are looking for ways to cut employees. More unemployed. Good job, Mr. Obama. The only jobs you seem to be creating are the ones at the unemployment Offices to handle the influx of people. Thanks.

Several eatery chains and two hotel chains have shelved plans to build and open new places. Once again, thank you, Mr. Obama. A few hundred building jobs lost, a few hundred maintenance jobs lost, and while pushing away business, in the process you’ve taken down a whole bunch of small mom-and-pop support service businesses.

A socialist who won a seat on the Seattle City Council said she will fight hard (I will not degrade this commentary with her name) to get a $15-per-hour wage for the entire city. Lunacy.

What will it take to get you lefties to see what your plans do to people? How many jobs are lost? How many families have to cut back on food and services? How many now can no longer afford healthcare?

Even when given proof that these things are happening, you ignore it. You guys are like Baghdad Bob standing at the podium, bombs going off all around, while he is saying, “We have the enemy defeated, outside the city walls all is well. Victory is near.” You need to open your eyes to reality.

 

Joe Messina is host of The Real Side (TheRealSide.com), a nationally syndicated talk show that runs on AM-1220 KHTS radio and SCVTV [here]. He is also the current president of the Hart School Board. His commentary publishes Mondays.

 

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6 Comments

  1. Marc Aronson says:

    The problem isn’t Obama. It is those who are behind the scenes who tell Obama what to do. Does anyone actually think that Obama had anything to do with writing The Affordable Care Act? Obama’s just a puppet who reads telepromters well.

  2. msc545 says:

    Actually, you need to open your eyes to reality. Whom did you think all those poor small business owners were going to sell their goods to when they refuse to pay people a wage that human beings can live on ? I realize that business owners are loathe to give up a penny of profit, but there is no profit when there are no customers.

    I am not going to even get into the morality of this entire issue other than to ask you to take note of what happens historically in countries where inequality becomes intolerable. It isn’t pretty, and we don’t need it happening here. Give up the idea that it’s ok to exploit people, and you can help prevent this outcome. You may not like it but it is in your best interests.

  3. Scott says:

    I, for one, am looking forward to placing my orders on touch screen and inserting my money into a machine. One less middle man to screw up my order. Unfortunately, for the business owners, they’re going to be taking on more low-skilled jobs and be forces to turn even longer hours to turn a profit. I hope you enjoy the self checkout line! That’s all that’s going to be left soon.

  4. Bill says:

    Your arguments are never fact based and each and every one can be proven wrong.According to you “In Santa Clarita, we have had several restaurants shut down due to a lack of traffic to keep them open, even though they were always packed, with a waiting line.” So which is it. lack of traffic or lines out the door?
    Let’s try another “They don’t want $12 hamburgers and a $14 rutti-tutti pancake plate or a $150-per-night Motel 6 room.” FACT: it would only raise prices about 3cents…pennies to a dollar!
    “It’s bad enough that most jobs created these days are part-time simply because most businesses can’t afford Obamacare” FACT: it’s simply not true and even the Repubs have dropped arguing about Obama care because most people like it! FACT: studies show that jobs ARE NOT lost by raising the minimum wage, the economy actually grows because more people have money to spend. Right now all the monetary gains since 2008 (the crash) have been only to the top 1%. People need raises and decent paying jobs and the minimum wage raise will help economic growth.

  5. Kris Kelso says:

    Its a catch 22 all around. Keep wages low and people can’t afford anything, raise wages and the businesses can’t employ as many people. So what do you do? The answer is ultimately there has to be an adjustment in the value of the dollar. Artificially the cost of goods and services is just going up up up but the value of the dollar is going down. It takes more to buy less. Neither solution is the catch all to fix the issue. I am a “leftie” as Joe calls me but I am a moderate which is where everyone should be. Nothing is black and white. I see no actual solutions offered by Joe, as usual, just name calling and finger pointing. What the right and the left need to do is shut up and start doing not blaming blaming blaming.

  6. Scott says:

    I’d sure like to see these “studies” Bill is reading.

    FACT is, these low skilled jobs are for low skilled workers. When a person acquires more skills, they are fee to move up and gain employment at a higher wage. If someone is fine with mediocrity and has no desire to improve their situation, whose problem is that? Certainly not the customer’s or the owner of the business.

    And btw, Bill, “most” (as you say) people are not happy with obabmacare. Aside from the chunk of society getting funds shifted to them from the producers. If people were so excited about it, why would it be so far off it’s target?
    http://dailysignal.com/2014/06/24/obamacare-exchanges-disappointing/

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