Minimum Wage Wars: The Employer Strikes Back
“I’ve just made a deal that’ll keep the Empire out of here forever.”
– Lando Calrissian, The Empire Strikes Back
Oh, Lando. Poor, ignorant Lando. All he wanted to do was run a profitable mining concern without Imperial intrusion. Faced with the choice of betraying his old friend Han Solo or having his business effectively nationalized (or, more accurately, universalized; this is the Galactic Empire I’m talking about, not regional or planetary statism), Lando chose to sacrifice Han. Of course, Darth Vader altered the deal, and the rest is cinema history.
Business owners can collude with government to protect their interests, but that doesn’t ever mean government won’t come back for another bite of the apple, whether it means raising taxes or passing a law to benefit an interest group, which are usually comprised of low-skill, low-wage workers.
If employees are able to unionize or petition the government to intercede on their behalf, then shouldn’t employers deserve to enjoy that assistance as well? The Employment Policies Institute thinks so. Their website reads:
“Founded in 1991, the Employment Policies Institute is a non-profit research organization dedicated to studying public policy issues surrounding employment growth. In particular, EPI focuses on issues that affect entry-level employment.”
Large corporations and Fortune 500 companies can more easily absorb significant hikes in the minimum wage, but small businesses cannot. The EPI seeks to counteract Fight For $15 and other minimum wage hike advocacy groups.
It’s not right that a small business owner should work 80 hours a week, struggle to pay their vendors and meet payroll, win new orders, deal with supply chain disruptions, manage the design, production, quality control and distribution of their products, and on top of that have to absorb the costs of arbitrary labor price increases (which satisfies an interest group whose members, if they had any self-awareness, would be placing all their efforts in transitioning away from the category of jobs that only pay minimum wage rather than making a low paying job more worthwhile, and therefore becoming complacent) but have real effects on employer and employee, and consumers alike. Small businesses have to cope with several variations of the law of scarcity, whether it applies to material, labor, or customers.
CNN Money reported:
“Looking to ‘make it easier for small businesses to add their voices to the minimum wage debate,’ the Employment Policies Institute recently launched an iPhone app called Wage Engage.
It seeks to alert business owners when minimum wage legislation is introduced in their area — and then lobby against a wage hike measure ‘at the push of a button’ by sending a generic message to lawmakers.
‘Please consider the evidence that a minimum wage increase will result in unintended consequences for low-margin businesses like mine,’ the template reads.”
The app first came to my attention while listening to Fox Business News on the radio in my car so I can’t provide a quote, but I can paraphrase a poignant point made by the representative from EPI: unemployed and part-time low skilled workers, activists, and employee union reps are the ones who have the time to agitate for minimum wage hikes; small business managers and owners do not have the time to refute the arguments made by those out of work or made by those whose job it is to promote arbitrary raises in labor costs; employers are too busy running their businesses to argue with activists and explain themselves to their employees.
This is a start, but is very narrow in focus. In fact, it is quite myopic because the intended audience, legislators, comprise a tiny segment of the population, and most likely are not and never will be customers of the businesses the Employment Policies Institute are attempting to protect. Further, it reinforces the falsehood that government is (1) the engine of economic growth, (2) the greatest champion of businesses, (3) the greatest defender of employees, and (4) the greatest protector of customers.
We non-statists are well aware that this is complete garbage; the greatest guardian of the rights and interests of businesses, employees and customers are *SPOILER ALERT* business owners, employees and customers.
A large corporation can hire lobbyists and activists to defend their interests from further government intrusion and from labor unions, but a small business can’t. However, that doesn’t mean small business owners can’t do anything to win some empathy from their low-skilled employees and customers who sympathize with low wage workers.
Fortunately, we do not really live in a world where solutions are restricted to a binary choice. It doesn’t just have to be about what government can do to help employers vs. help employers. As I’ve said before, there are often third ways.
Small business owners can appeal to their customers directly. Put another way: Let the market figure it out. In its most generic form, the market is simply people. It may be easy to cast the plight of the working class in terms a business’ customers may be sympathetic towards, but that doesn’t mean a small business shouldn’t try to curry favor with their customers not just through prices and availability of their products, but by explaining to their customers, current and prospective, just what may happen if that business is forced to contend with a labor rate hike.
There are signs all over a business’ walls. Signs that inform employees of their rights, existing state minimum wages, warnings and instructions from the EEOC and OSHA, that they must wash their hands before leaving the bathroom, and on and on. Many restaurants are forced to inform their customers the ingredients in their dishes, the nutritional facts, alcohol content of drinks, etc.
If I was a small business owner, I’d have signs made and hung up that detail what would happen should my labor costs surge upward. Simple charts and graphs and statistics that would detail cause and effect. If I have to pay $15 instead of $10 an hour to my wait staff, you won’t see your waiter as often because I’ll have to downsize the wait staff. Or I’ll keep the same number of wait staff but let go of a few cooks and it’ll take a bit longer to get your meals (and often customers tip the wait staff less as a result). Or I’ll just raise my prices correspondingly, and I’ll either have fewer customers, which obviously effects my bottom line and have less revenues, etc.
The point is, businesses don’t only have to get the government to help or lay off; they can detail the effects of an arbitrary hike in costs directly to their customers, and either customers can advocate on behalf of their favorite neighborhood businesses to counteract employee advocate groups to government, or to the employees themselves to ask them to reconsider their demands. A minimum wage hike does not exist in a vacuum; it is felt universally.
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