As a small-business owner who has worked in the service industry for more than 40 years, I have seen my share of economic challenges and government policies. The current political and economic environment is, however, by far the most difficult as a result of the policies coming out of Washington.
Not only are business owners struggling under Obamacare’s higher costs and the threat of a massive expansion of overtime rules, but now the Senate is preparing to vote on legislation to raise the minimum wage to $10.10 an hour — a devastating attack on small businesses everywhere. Taken all together, these federal mandates stress operating budgets, stifle business expansion and grind hiring to a halt.
These federal mandates are hurting businesses large and small — businesses that are just now regaining some small sense of stability following the worst recession since the Great Depression. As our economic future remains uncertain and hiring stagnates, regulations that squeeze budgets and hamper growth are not the solution to our nation’s economic troubles.
While we can all agree that too many Americans are unemployed or underemployed, President Barack Obama has neglected to consider comprehensive, thoughtful solutions and instead choose to push populist and simplistic proposals that neither lift up lower-income workers nor allow businesses to grow.
In fact, they do the opposite. According to a report from the nonpartisan Congressional Budget Office, an increase in the minimum wage to $10.10 would eliminate 500,000 jobs by 2016. This is unacceptable and, according to a new Bloomberg poll, most Americans agree. In the poll, support for a minimum wage increase evaporated once respondents were asked to consider the job losses that could result from a mandatory wage increase. This poorly targeted federal mandate would only amplify the effects of an already struggling economy on those who’ve been hit the hardest.
Having spent my life in small businesses — first as a worker, then a manager and finally as an owner — I understand the challenges and opportunities facing both employees and employers. There is a better way to approach these issues in our society. Tackling income inequality should not be addressed by an either-or approach. We can — and have — had it both ways. What we need is a comprehensive, multi-faceted solution that provides more education, training and lifts people into the middle class in a way that also encourages business growth.
Economic experts across the political spectrum, from the Heritage Foundation to the Brookings Institution, agree. And in fact, the CBO’s analysis of the $10.10 wage concluded that a minimum of 500,000 jobs would be lost by enacting such a significant increase.
Engaging policymakers, economic experts, industry, workers and consumers in a reasonable policy debate will ensure that all voices are heard while addressing the true issues in our economy.