I’m a serial entrepreneur. I’ve started and run a number of businesses, and won’t bore you with the details. Some succeeded and some failed. I’ve paid employees when I didn’t take home a paycheck myself after putting in a 60-hour week. Yeah, I know small business issues well.
The recent letter regarding a higher minimum wage hurting businesses needs a few corrections. If you’re going to make up facts out of your own head, you can justify any position. And calling anyone who disagrees with you a socialist only works on the playground.
Here are the facts:
The writer states that most minimum wage jobs are entry-level jobs for kids. In fact, only 6.4 percent of these low-wage employees are teen part-timers. A recent Economic Policy Institute report found that nearly 90 percent of workers paid the minimum wage are 20 years old or older. More than a third are married and over 25 percent are parents.
He says small businesses employ most of the minimum wage workers. Not quite true. Two-thirds of low-wage earners work for big companies better able than small businesses to absorb modest pay increases.
He further implies that an increase the minimum wage isn’t justified because a person’s productivity doesn’t validate it. Yet, according to according to a 2012 study of the Center for Economic and Policy Research the minimum wage would now be $21.72 an hour if it had increased at the same rate as productivity.
The CEPR study also found that the minimum wage would be $10.52 an hour if it had simply kept up with inflation since its real value peaked in 1968.
However, there’s a more important reason to raise the minimum wage.
Consider the kind of life $7.25 an hour buys. At that rate, a full-time worker is taking in only $1,250 a month, before payroll taxes. Try stretching that over the basics of rent, utilities, groceries and gas. Need car repair? Lose your job? What if you get sick? Good luck.
Here’s the truth. The middle class in this country is collapsing. From 2009-2012, the richest 1 percent of Americans captured 95 percent of all new income, while the typical middle class family has seen their income go down by more than $2,100. The number of Americans living in poverty is nearly the highest on record and the gap between the very rich and everyone else is growing wider and wider.
The writer doesn’t seem to care. And very few people in Washington give a damn.