(UnitedVoice.com) – Since Democrats seized control of power in Washington, DC, they have been doing all they can to increase the federal minimum wage to an unrealistic $15 per hour. It’s a crippling one-size-fits-all government approach that could lead an untold number of small businesses to reduce employees or close shop if wages outstrip revenues. Those concerns fell on the deaf ears of Democrats who are more intent on a far-left agenda than the laws of basic economic principles.
Fortunately, as long as the filibuster exists in the Senate, the $15 minimum wage proposal stands no chance of passing the upper chamber. However, what if smart, scheming Democrats found a way to use the COVID-19 relief as a shield. If so, the minimum wage wouldn’t even matter. Democrats could use the federal government’s power to squeeze more out of businesses, and in doing so, take credit, hoping it will give them goodwill with voters and a permanent voter base. However, what would the long-term consequences be to America?
Did Democrats Find a Way Around the Minimum Wage?
Perhaps Democrats found a way around the minimum wage. Maybe it was even an accident, but it’s doubtful. Policymakers and politicians are highly skilled craftsmen in the art of cunning manipulation. Rarely does anything happen by accident.
Let’s lay out the scenario.
In February, Democrats passed a COVID-19 relief package that the GOP opposed. The bill restored monthly federal $300 payments to the unemployed. This supplement is in addition to unemployment benefits for those out of work due to the pandemic. Republicans argued that the additional payment de-incentivizes work and would encourage people to stay home.
That may be happening to small business owners right now who don’t have deep pockets and high-profit margins like corporations. In March, a National Federation of Independent Business survey found 42% of their members couldn’t fill job openings. Business owners cited the unemployment benefits in large part as one of the factors. The National Bureau of Economic Research concluded that unemployment benefits increased by 10% since the beginning of the pandemic, and job applications dropped 3.6%.
Many small businesses, retail, and restaurant workers make more money on unemployment and do not need to work. Now, Democrats are proposing to make the expansion of the federal unemployment benefit permanent.
There’s Only One Solution
As it stands, businesses can’t afford to go on with low worker counts and fulfill the growing demand by customers. To lure people back to work, they will need to substantially raise wages to be competitive with or higher than unemployment benefits. The result is a forced increase in wages without increasing the minimum wage.
That could be the only way to overcome the government’s manipulation of the job market. Not only will businesses be competing with each other for employees. They’ll also be competing with free money from the government.
On the one hand, it’s a brilliant racket. On the other hand, it’s frightening how Democrats are using the government’s power to manipulate the marketplace to achieve their political agenda, even if it’s by accident. It could be costly to small businesses and create an entirely new class of government dependency.
Don Purdum, Independent Political Analyst
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