The Trickle-up Effect

The inconvenient truths of the minimum-wage increase: Business
can’t just ‘make more money’

I WISH WE could get our elected leaders to acknowledge it is high time for governments at all levels to realize that small business is the heart of our economy, not a beast of burden to be abused until it drops.

These days, there are often more rules and regulations than customers, and the financial responsibility of supporting the wasteful ways of our social theorists and their political lackeys is stifling the very kind of expansion and job creation we so desperately need.

Take the increase in the minimum wage, for example. Designed (by canny social engineers) to provide a “living wage” to our least skilled workers, it is distorting the entire employment spectrum in negative ways that business spokespeople predicted, even while the politicians pooh-poohed their concerns.

To raise a minimum-wage employee’s pay by several dollars an hour does a lot more than ­provide additional income without additional effort, it also puts pressure on the entire wage spectrum. The employees who were already receiving more than the minimum wage due to having a better skill set or more experience expect, quite reasonably, that their better credentials should still earn them more than those who bring minimal skills to the workplace.

In order to deal fairly with them, many ­businesses are having to increase their wages, too. After all, they have already proven their worth and earned the right to be paid more than their lesser-skilled minimum-wage comrades.

I won’t go into the number-crunching here, but if you have the time it doesn’t take long to calculate that the financial burden is going to be enormous. Fortunately for the social engineering crowd that is currently waging the world’s most drawn-out coup d’etat right here in Canada, there is no cost associated with this particular piece of social justice.

Thanks to the greedy small business owners, who are making fortunes and already have secret billions stashed away with which to fund these increasing costs, there will be no negative impact on the economy.

(The comment immediately above is made tongue-in-cheek because most people with two clues to rub together know it is the consumers who will pay. I point this out for the benefit of the satire impaired, likely soon to be classed as a disability and eligible for government handouts. In politics, you buy your votes where you find them.)

This is just one small example of how governments regularly strangle small businesses with red tape, bureaucratic inertia and a complete misunderstanding—willful or otherwise—of the realities of today’s real economic climate down on the street.

How about the following for a tongue-in-cheek analysis of what the social engineers may really be up to. Bear in mind that, as yet, they have a full stranglehold on just one party, the NDP, but their sights are ultimately set much higher.

Suppose the small business community recognizes they cannot provide wage increases across the board just because the minimum wage went up. Believing their customers will not support the required price increases, they have no choice but to leave the rest of their employees at current wage levels.

That will create a large mass of disaffected ­voters, many of whom will see the business owners as the cause of their disadvantage and look to politicians for the same kind of higher-wage “justice” already received by their minimum-wage co-workers.

Meanwhile, those former min-wage types will have a huge precedent for expecting more perks from the government, and many of them will no doubt cast their future votes in support of further misguided economic intervention by the governments, as long as it puts more dollars in their pockets.

I will leave it to you whether or not I should have identified the previous three paragraphs as satire. The Trickle-up Effect  Columns Jim Chapman

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