“Government has to lead.” Where in the world do you expect to hear this statement? Venezuela? Russia? Cuba? Iran? You need look no further than Summit County in Colorado.
As reported in the Summit Daily, Commissioner Thomas Davidson is an avid supporter of forced minimum wage. The county convened a study group which met for over three months to examine current policy and raising minimum wage 75 cents per hour each year starting in 2021. It appears the increase is not getting much support from the townspeople and business owners as objections continue to be voiced. Commissioner Davidson’s response to disagreements with his view: “Right now, they are waiting for the towns to agree to it, but that’s not how government works. In America, government has to lead.”
What gives Commissioner Davidson and Politicians, Bureaucrats and Interested Parties (PBIs) the “right” to take away the freedom of employees to negotiate their salary, compensation package and work flexibility with their employer? People own their thoughts, capabilities, and skill set which they present to an employer for potential employment, not government. We do not need a “one size fits all” solution to a problem that does not exist. By espousing this policy, PBIs may actually decrease the potential earnings of an individual because a person is viewed as simply filling a vacancy versus the value of the education and experience that the individual brings to the place of business. Additionally, the policy may negate the hiring of an individual because s/he may be willing to work for less in order to gain confidence and skills which may lead to a higher income in the future. This is especially true for first time job applicants like teenagers. In fact, employment is the voluntary exchange between two parties. Is it not better to have a job than no job? This brings about independence and the freedom to choose career paths based on experience, interests and level of education.
Please keep in mind that wages are not the only employee benefit that is granted to an employee by an employer. This includes flex time, health insurance, paid sick leave, stock options, child care, etc. There are many potential mandates that impact the financial stability in a business. Small business employers spend approximately $12,000 per employee on mandated rules and regulations.
Truth be told, if minimum wage increases to $15 per hour and beyond, some workers will see a slight increase in their pay while others will see no change as their income is at or slightly above the proposed $15 per hour rate. This may create some envy within the business structure. Some workers will be let go and some workers will never be hired. Businesses, especially your “mom and pop” shops, will not be able to absorb these additional costs.
The NFIB Research Center examined the financial effects of $15 per hour legislation in reaction to the proposed national Raise the Wage Act in 2019. This act proposed a minimum wage rate of $15 per hour by the year 2024, to be raised each year thereafter. On the national level there would be massive job losses:
- The cumulative real output loss would exceed $2.0 trillion with cumulative real GDP loss exceeding $980 billion over the ten-year forecast window.
- If the bill becomes law, there would be more than 6 million fewer jobs in the United States in 2029.
- Americans will have $103 billion less in disposable personal income in 2029.
- The act would reduce the number of able-bodied individuals participating in the labor force by more than 615,000 individuals in 2029.
Small businesses would be especially vulnerable:
- More than 900,000 jobs lost, or 57 percent of all private sector job losses, would be at companies with fewer than 500 employees.
- Nearly 700,000 jobs lost, about 43 percent of all jobs lost, would be at businesses with fewer than 100 employees.
- The negative impact of the proposed legislation would fall disproportionately on small employers, which are less likely to have the cash reserves or profit margins to absorb the increase in labor costs than larger businesses.
Specific industries are exposed more readily and would be accountable for almost one-quarter of lost jobs. Many of these jobs are currently held by first time workers:
- Industry-Specific Landscape: The employment reduction in retail, food service, and administrative support account for nearly one-quarter of lost jobs.
- The retail trade industry is forecast to have more than 162,000 fewer jobs by 2029.
- Food services and drinking places would have more than 165,000 fewer jobs by 2029.
- Administrative and support services would see a decline of more than 85,000 jobs by 2029.
- The forecast reduction in employment of the three industries combined is more than 392,000 lost jobs by 2029, approximately 24 percent of total forecast jobs lost.
If “government wants to lead” us into a tremendous loss of jobs resulting in billions of dollars lost in disposable personal income, Commissioner Davidson is right. However, I will join the freedom-loving people that embrace limited government. I will take complete ownership of myself accepting full responsibility for my actions. Ownership includes the selling of my skills, education, experience and desire to work with others at an agreeable income level. Government will not own me because I will not allow government to severely limit my choices and opportunities. I am the leader of myself.