A Living Wage May Be the Only Thing That Saves Small Business

By John Kubinski (MCAP Co-Founder)

Opponents of raising the minimum wage always claim that it will kill small business. That paying workers 10 or 11 dollars an hour is just too high. Small business owners face many obstacles and incur many costs every day. Most are paying high interest to a bank on loans they took to start their business. They have to pay rent to a landlord and depending on the location (which can make or break a business) that could be extremely expensive. Rising insurance prices as well as increased costs in utilities take a huge toll as well.

The cost of supplies, equipment, telephone service etc….is all going up. The small businessman is finding it harder and harder to turn a profit. The opponents of raising the minimum wage claim that increasing workers’ wages will be the final nail in the coffin for the struggling small entrepreneur. This is nothing but misdirection. There are plenty of enemies of the small businessman but the people that work for them are not among them.

small businessFor almost 20 years there was a hardware store in my neighborhood. It was located in a small plaza that contained a grocery store, a small Italian restaurant/pizzeria, a nail salon and a few other small businesses. This plaza was conveniently located and easily accessible. There were hardly any other stores in the area. The businesses relied on the fact that they provided good service in a good location. Their prices were higher than any of the giant mega-corporations but not so bad as to dissuade people from shopping there. Over the years the costs of business, as mentioned earlier, continued to grow and the prices in these stores continued to rise. As our economy worsened price became more of a factor. I have to admit that I was unhappy paying $15 for a snow-shovel in the hardware store that I could have gotten for half the price elsewhere but I continued to shop there. About a year ago a Loews opened about 2 miles away. Within 6 months my local hardware store was gone. Driven out of business by the corporate giant.

In uncertain economic times people are always going to be forced to find the best bargain. They will shop for the low prices. They will be forced to go to Home Depot instead of the local hardware store. They will shop in Walmart instead of the local grocer. They will eat at McDonalds instead of the local diner. Small businesses will crumble. This has been the game plan of Walmart for years. They go into a town, build a mega-super store, drive all the small businesses into ruin and then hire the unemployed workers for minimum wage jobs. The low paid workers then have no alternative but to shop there for the low prices. It’s a vicious circle.

The best thing anyone could do to help small business owners is to make sure there is a public with cash in their pockets. If people can afford to choose between the giant mega store and their neighborhood business, at least they have a choice. When the price of merchandise is the only factor it equals certain death to the small businessman.

Many people are opposed to paying what they deem low skilled workers a living wage. They claim that flipping burgers or packing out groceries onto the shelves doesn’t warrant a livable wage. There are 2 things wrong with that argument. First, no job is a bad job. If you work hard and your employer benefits from your work, you deserve a fair wage. McDonalds, Walmart, Target, Home Depot etc….all rakes in billions of dollars in profits. Secondly, these service jobs are the market created by our free capitalist system. Thanks to ridiculous trade agreements like NAFTA many well-paying middle class jobs (especially in the manufacturing industry) have been sent over-seas. This is not the fault of the American worker. Why should workers be forced to bear the brunt of corporate greed? Our politicians all claim to love small business owners and vow to save the middle class but their actions all prove otherwise. Wall Street has rebounded from the economic crash while the middle class has been decimated and a new class (the working poor) has grown. Poverty levels in this country are comparable to those at the time of the great depression. Raising the amount of money workers earn is essential to restoring this country to prominence. You can’t live in a consumer driven economy without consumers.

We need to WAKE UP. It’s time workers and small business owners realize that giant corporations are taking over every aspect of our society. The more wealth they accumulate, the more power they can buy in government. The more influence they wield, the weaker the people become. They control the media and therefore control the conversation. They divert their takeover by creating division among the people. They create a society that is more concerned with buying the new video game system than one that is paying attention to what their government is doing.


One response to “A Living Wage May Be the Only Thing That Saves Small Business

  1. This has to be the WORST argument I have ever heard for raising the minimum wage – you think because someone is making 15 an hour (which is still poor in most parts of the country, even if it above the fictitious poverty line), they will shop at the more expensive local shop? No, they are STILL poor – they will STILL shop for the cheapest prices.

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