Last week, a bill that would have raised the federal minimum wage from $7.25 to $10.10 failed to pass in the Senate. While many small business groups were quick to applaud the move, the question remains: does this really help the economy or are we once again witnesses to the greatest political show on earth?
Many small business leaders were vocal about their disapproval of the proposed wage increase. In an official statement published shortly before the vote, NFIB Manager of Legislative Affairs Ashley Fingarson claimed that “…lawmakers are targeting the nation’s economic engine – small business owners – with an anti-employer agenda. With increases to health care costs, higher taxes, more costly regulations, and now a dramatic minimum wage increase, small business owners simply can’t afford another excessive government mandate.”
Shortly after the bill was defeated in the Senate, International Franchise Association President and CEO, Steve Caldeira, had this to say:
“We commend the Senate’s decision to reject legislation to drastically raise the minimum wage, and thank the Senators who took a stand to protect our nation’s small business franchise owners. Congress’ own economists at the Congressional Budget Office have said that an increase in the minimum wage would reduce employment, and thankfully enough Senators heeded this dire warning in a sluggish and still fragile economy.”
They make it sound like a catastrophe was averted. But, the reality is that the minimum wage has failed to keep up with inflation for the last four decades. Instead of completely shutting the initiative down, why not make a counter proposal for a more digestible increase to the minimum wage? The Democrats’ proposal may have just been too large in too short a period of time. On the other hand, the Democrats gained massive brownie points by showing Republicans as greedy and out of touch with the people. So, maybe real change wasn’t the goal here. At the end of the day, we’re left with nothing but a few good headlines.