The Democratic Congress Strikes Again Against the Little Guy

Count another victory for the Democratic Party over the interests of the small businessman.

To get the needed funding approved so our troops could continue to defend freedom, President Bush was strong armed into approving a minimum wage hike from $5.15 to $7.25. Fewer than 1.7 million workers make minimum wage, although the Democrats claim as many as 5.6 million of the nation’s 130 million workers could see their salaries rise. They cannot say for certain because a percentage of those workers will likely find themselves out of a job.

Very few working families rely on minimum wage jobs alone to support their families. The very small number that do qualify for welfare. Many of the rest work such jobs as part of a combination package of part time employment. About fifteen years ago I was supporting a family on two minimum wage jobs and one that paid a few dollars over that. Other minimum wage workers are spouses or significant others of high wage earners who work for a little extra income or to pass the time.

Before anyone starts talking corporate greed, they must understand that the majority of major corporations already pay over minimum wage. Most businesses that pay minimum wage operate on a small scale. Local bookstores, restaurants, and other small city downtown establishments pay minimum wage. One can hardly accuse these businesses with their razor thin profit margins of “corporate greed.”

How does a small business like this cope with the hike? It lays off workers while the owner him or herself works more hours. Since the cost of labor represents such an important factor in a business’s profitability, the extra pay obligation may be the determining issue in whether or not a small business fails. Certainly it presents a higher obstacle to an entrepreneur just getting started. Some owners already pay employees “under the table” and raising the minimum wage only encourages more skirting of the law. Others will pass the costs onto the consumer. Beware parents with children in day care settings, your bill is about to go up.

For the most part, the market has determined that low level service employees of companies such as McDonalds will make almost what the projected minimum wage hike will be. That means the Democrats did not overly antagonize their big business donors. As usual the small businessman bears the brunt of liberal victories over “corporate greed.” They should be sure and send a letter of appreciation to their Democratic representatives in Congress.