Dear Editor:
At a recent event, Hillary Clinton stated that businesses and corporations are not the job creators of America. “Don’t let anybody tell you that it’s corporations and businesses that create jobs,” the former Secretary of State said.
Interesting thought, I wonder how jobs were created before we had a benevolent government to do that for us?
Ms. Clinton also defended raising the minimum wage saying, “Don’t let anybody tell you that raising the minimum wage will kill jobs, they always say that.”
Well let’s take a look at the real implications of raising minimum wage. On the surface, it sounds OK, getting more money in the pockets of those in minimum wage jobs. But in reality it does more harm than good.
All of us know that in order to “make ends meet” we have to bring in as much money as we spend. If we spend more money than we make then we go in debt or worse, bankrupt. So when our light bill, heat bill, gasoline for our car, groceries for our table all go up in price, we have to either reduce what we spend on all or expenses by not leaving the lights on, turning the thermostat back, carpool or make only essential trips in our car, buy less food or find a way to make more money.
Naturally if our wages go up, that will give us more to spend.
This same line of thought holds true for businesses.
Take the local pizza shop, like you, they have a light bill, heat bill, food costs, and fuel costs if they deliver the pizza. All of those costs go into determining the cost to sell a pizza. If any of those costs go up, then the owner must decide to make less money on each pizza or to raise the price to offset the increase of the expense.
There is one more expense that is not mentioned for the business owner, and it is the highest expense. Wages, whether for themselves or for any employee they may have, account for 75 percent or more for most businesses. Like any other expense, when the wages for the employee goes up, the owner must either make less money or raise the price of the pizza.
So in short, when you raise wages for an employee, the business has an increase in expense. This expense is not only the increase in wages for the owner, but also the increase in the employer’s share of Social Security, Medicare, Unemployment, as well as any other benefits that are tied to the wage amounts.
If you take this wage increase across the board, that would mean that all businesses would be impacted and in most cases would have to raise the price of their goods and services to just stay even.
When all prices go up, your money doesn’t go as far. So that $5.99 pizza is now $7.99 just so the owner can stay even. That increase in minimum wage increased the cost of gasoline, to cover the wage increase the convenience store clerk received. The increase in minimum wage increased the cost of pizza sauce to cover the wage increase of the plant worker who loads the delivery truck, and so on and so forth.
Now when you raise the amount someone gets paid, that raises their income tax. So in short, a raise in the minimum wage is really just a way to increase taxes for not only employees, but also business owners giving the politicians more money to spend on their pet projects.
So Ms. Politician/Mr. Politician if you really want to help out the American people, don’t raise minimum wage, instead lower our taxes. It’s your turn to tighten your belt and reduce your expenses instead of increasing your income. Lowering our taxes will put more money in our pocket and that’s good for everyone.
Jim Mattern
Grampian