There has been a lot of talk about the Biden Administration’s plan to raise the minimum wage to $15 an hour. While they are presenting it as good policy, it is really just another bad idea that will actually hurt Black-owned businesses already struggling because of the continued negative economic impact of keeping our economy closed because of Covid-19 in America.
You do not need an official study by an elite school or think tank to tell you what you already know, local Black-owned businesses are closing down and most likely never returning because of this pandemic. You see it or hear about it almost every day.
These closures have a real impact on communities all over the nation because small businesses are the backbone of America. Small businesses are job creators, they give young Americans their first jobs and they provide necessary goods and services to the communities they serve.
It makes no sense to impose legislation or executive actions that would purposely hasten the closing of more small businesses in the already economically fragile communities that need these businesses to remain open for the stability of their socio-economic ecosystems.
The head of the National Urban League, Marc Morial told CNN “Black-owned businesses came to the pandemic thinly capitalized and already facing a range of challenges. Many have had to close because of no business, no savings, no reserve funds, and no access to financing.” His points about the economic conditions of some of our Black-owned businesses are valid and should be taken into consideration when imposing big government mandates that could further jeopardize their futures.
An across the board $15 an hour minimum wage hike does not take into consideration each individual businesses’ ability to give automatic raises for all their hourly employees. Entrepreneurs should have the freedom to determine what they can afford to pay their staff and when, without being forced to pay what they can’t afford.
Businesses are already having to cut staff, operating hours, and reduce occupancy. Extra costs for equipment, protective products, clothing and masks for employees and customers because of public health concerns are also eating into profits. Joe Biden’s minimum wage hike ignores all of those factors.
This mandatory $15 an hour increase does not address geographic concerns. The demand, cost of living and overall operating costs to run a business in North Carolina is vastly different than Northern California. Everyone understands that the cost of housing, fuel, taxes and even food varies by location. This one size fits all action would have a negative impact on smaller cities and businesses.
Our free enterprise system has always been the best measure, not big government. When big government made a choice to force Americans to buy into Obamacare it did not take into consideration younger, healthy Americans that chose not to spend their money on pricey health care plans. The individual mandate, loss of your ability to keep your personal doctor and increase in premiums meant millions of Americans saw their costs increase because of that plan.
There are examples of companies that already pay their employees $15 an hour or more because they can afford to do it without reducing staff and services.
If a small business has to spend money they do not have, two things will happen. They will either be forced to fire staff they were able to hold on to because of PPP loans or community support in the middle of a pandemic, or they will increase the prices on the consumers who are also facing the same economic hardships. Either way, it results in consequences that were completely avoidable.
The Biden Administration should stop playing political games, pull this from the Covid-19 stimulus package and be serious about helping all Americans and our small businesses. If the Biden White House and the Democrat controlled Congress really wanted to help communities, they would push for all public schools to fully open immediately since the data, science and doctors all agree that they can safely re-open for students which will help parents, especially single parents be able to go to work.
Senator Tim Scott said it best, “Forcing a $15 minimum wage into a coronavirus relief bill would do nothing but shutter the millions of small businesses already on life support and would force those that survive to lay off employees.” Drastically raising the minimum wage in the middle of a pandemic that is disproportionately hurting Black entrepreneurs will do more harm than good. The Democrats in Congress know it, and America’s Black-owned businesses know it.
Mr. Paris Dennard
Senior Communications Advisor for Black Media Affairs