McDonalds and the $15 minimum wage

$15 Minimum Wage – The Cost of Going Out of Business

The $15 minimum wage is all the new buzz in the political realm today. Given the income rate versus the cost of living I understand the argument so I wanted to dig a little deeper to find out where we really are and what I found scares me. First of all, the raise to $15 an hour as a new minimum wage is like the Dutch Boy putting his fingers in a dyke to stop the leaks from pouring through.

This is a typical government response to fixing problems – put a bandaid on a severed limb and kick the can down the road. CA Governor Jerry Brown was hailed as a hero in the eyes of minimum wage earning adults while being viewed as the devil by all business owners and those who understand the true impact of a $15 minimum wage. First of all, with the exception of a few cities who have already adopted a $15 per hour minimum wage, the wage goes up on a gradual scale until it reaches $15 per hour in 2023.

I understand the argument from both sides, I have been a business owner and have written the payroll checks from my own pocket. I also understand the income increase over the years vs the cost of living increase. A new minimum wage however, is just another nail in the coffin for small biz owners, but it is only one nail. Between the state and feds (especially in CA), honestly the nails no longer matter because they put the coffin in the ground a long time ago.

While Entrepreneur Magazine shows that small business failure rate has actually declined since 1977, if you look at the numbers closely, you will notice that, hidden in the details, so has the ratio of small business creation. Entrepreneurs understand that it is harder to start a small business and survive in today’s economic environment so fewer people start their own company. On the opposite side of this factor is the micro-business explosion. These one to two person operations are the result of the economy and people trying to survive. Participants in this market have driven down the small business failure rate because many of these float in and out of business with little or no tracking. So how do we get an accurate picture? We look historically and according to the SBA, about 33% of small businesses will survive 10 years and only about 25% will survive past the 15 year mark. Not the best odds, but guess what, we just made them worse.

Here is where the primary disconnect between proponents and opponents of the $15 minimum wage exists. When you step in and ‘subsidize’ the minimum wage, what the population may or may not realize is that for every dollar the wage goes up, people receiving that dollar are affecting the supply / demand curve of labor. So if an employee costs $15 plus SS and FICA, I have raised the COGS by that labor cost and rule of free market says that I will naturally find a way to lower that cost, whether it is by replacing humans with automation (today’s technology makes it pretty easy to do) or by determining that my costs outweigh my minimum acceptable profit margin so then it makes no sense for me to be in business.

We are looking at two diametrically opposed forces moving against each other – the cost of living vs the survivability of businesses in the USA. From the viewpoint of the wage earner here is the part that is truly scary, we have to feed our families and, although the unemployment rate shows that it is low (currently hovering around 5%), everyone knows that this is a fictitious number that has little meaning. Under-employed and non-reporting far exceed the rate whose only objective is to make the administration look good. Because we allow it, government is once again stepping into our lives and regulating how we should live – on $15 minimum wage. That is, if we can get a job.

Will $15 Minimum Wage Even Help?

Okay, here is the really scary part and it is already happening in parts of our country. $15 minimum wage does nothing because adults still cannot survive or feed their families on minimum wage, but the government keeps trying to impose their means of making minimum wage survivable. It will never happen and until we attack the true problem we will continue in the opposite direction of where we should be headed. The only thing that will increase is the propensity to poverty and you can see the numbers that are already moving in that direction below.

Small business and enterprise is the backbone of our economy and, until we quit penalizing capitalism and entrepreneurial activity, our gap will continue to grow. Wage earners – If you are working class America (the forgotten middle class), ask yourself, “Is my life better or worse than it was five years ago? Ten years?” The answer is obvious, but the choice not so much so. Without going into depth on growing class inequalities and the disappearance of the middle class, we can safely surmise that manufacturing, mid-level and management jobs (the backbone of the middle class) are disappearing at an alarming rate while lower class and upper class continue to grow.

$15 Minimum Wage - PEW Research - Middle Class Losing Ground

Still a proponent of the $15 minimum wage? Talk about shooting yourself in the foot. What happens when there are no more jobs?

Still an opponent of the $15 minimum wage? Don’t worry, you won’t be for long because those will be the only jobs that exist as the socialization of our country continues. Unless we shed the burden of imposed expense on our small and medium-sized businesses, until we actively and aggressively promote entrepreneurship and unless we become business friendly and entice our companies to come back home from overseas, we are on a doomsday path to a socialized destiny. Why do we think the Bernie Sanders movement has become so popular? Same for Trump. Americans are fed up and have nowhere to turn.

It is time for us as citizens and as leaders to take responsibility, to become accountable once again for our destiny and that of our children. We are in the middle of a peaceful, but serious revolution. It is time to listen and time to take decisive action to recapture our greatness as a country.

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The Republican Revolution (Trumpublican Movement)

I have argued for years that both the Democratic Party with its left-wing social tendencies and the entrenched, backboneless Republican Party have far outlived their usefulness and their capacity to represent “We the People”. I have asserted that, time and again, these parties have evolved into self-serving, elitist membership clubs that are out only to protect their positions at the expense of the people they are supposed to represent. Time for a Republican Revolution.

Wake Up! Really?

On the Democrat side, it never ceases to amaze me at how adept that party is at indoctrinating from a very young age. They mold the youth of our nation into entitled, hive-minded people who, for some strange reason, think that government will solve all of our problems and can create wealth out of thin air. News flash — The only way the government can solve your personal problems is to take away your ability to think for yourself, make government larger until it takes over every aspect of your life and legislate you to death.

Additionally, there are only two ways government can provide you with free amenities such as free education, free health care and free infrastructure. One, tax you more to create the money needed to run this ever-growing monolith of fake free services. Two, if taxes don’t pay for all the “free stuff”, they will have to add the expense to the bottom line of the national debt. The problem is that they are already doing both. Check out the national debt clock. With national debt growing at $2 billion per day and unfunded liabilities north of $100 trillion. Everybody on the left side of the fence has to let me know how we are going to pay for a bigger government when we can’t afford what we have now.

“I Would Like an Order of Intestinal Fortitude Please”

So here comes the Republican Party to save the day, right? Not so fast. The Republican Revolution – This election cycle has proven several very interesting things that we will get to momentarily. What comes to mind first and foremost when thinking of the Republican Party is, “Why aren’t they doing what the Republican Party is supposed to do?” I have not seen one, not one member of the Republican Party work to reduce the size of our government. All they are capable of doing is making feeble efforts to fight off growth of the government and they are not even doing that very well. Give in to the budget, give in to the demands of the DNC, give in, give in and give in some more. Worse is that the victories we claim are not really even victories at all – just a little bit less giving in.

“We the People” are pretty tired of status quo. For some reason, I had this feeling that I was one of the few citizens who were so fed up with our current state of politics that I might explode. One of the interesting side effects of this election cycle is that I find myself not alone. I am not alone in feeling betrayed by my own party. I am not alone in feeling as if my voice and my destiny has been ripped away and traded for a few pieces of silver to line the pockets of those in power – the career politicians.

A Republican Revolution

Guess what establishment. There is a Republican Revolution, actually more of an American Political Revolution coming and it is heading our way like a freight train. The polls and caucuses are demonstrating, between Trump and even Bernie before he sold out, that America is done with establishment politics. “We the People” are done not having representatives in Washington when these people are supposed to be faithful to us, the constituents. Time and time again they have betrayed us to the point where we can no longer trust them. They can throw money at it. They can get their best speakers and best establishment representatives, but to no avail. We are taking our country back.

The Trumpublican Movement

There is a movement rising that is sick and tired of traditional politics. This movement is no longer about the government, it is about the people and the removal of bureaucracy that overshadows and over-reaches. This movement is the New Republican Party. It is the Trumpublican Movement and the establishment can either embrace it or get out of the way. This is not about Trump the man. It is about what we are giving away as a nation.

This is a warning to the elite. If you do not accept the vote of “We the People” and you usurp our authority over you as our representatives, you will get steamrolled. You will get taken from your ivory towers and replaced with people who do not have power and money as their first and only priority.

The people are speaking. It is peaceful, yet determined. It is resolute in the final goal, to reclaim our country from self-serving politics. No longer will politics be a career. It will once again be a service to the nation and to the people. No longer will those in power stay forever to become so entrenched and entangled in our system that they think they cannot be removed. Part of this is still a dream, but the building of the tide is a reality so wake up and take heed. “We the People” are coming to claim what is rightfully ours, the destiny and future of this great nation.

You Do Have a Voice

Whether by accident or on purpose, Trump and the Trumpublican Movement have shown us what can be done when we are not beholden to anyone. From the perspective of most, Trump is not the ideal candidate, but most importantly, he is not a politician. Need more evidence? Simply look at how well Bernie did on the other side of the fence before they betrayed him. The reaction to Trump however, is the most telling sign of the change in the direction of political winds. “We the People” are speaking loud and clear and, for the first time in a long time, I have hope. This hope may be misguided but even this cannot be worse than status quo.

This is a Republican Revolution, the Trumpublican Movement. I am hopeful out of it will arise a New Republican Party that will once again represent our wishes and will once again do what is right to make our country great. It will not come easy, however. There is far too much at stake for the Establishment and they will do everything they can to protect status quo. We will have to fight for it. We will have to argue for it. We will have to get people to vote and believe that they can make a difference.

The sacrifice we have to make is a small price to pay for what we have to lose.