Flemming: You’ll need to buy more egg sandwiches if $15 per hour passes

By David Flemming

Many $15 minimum wage advocates like to argue that such a law would put more money in consumers’ pockets, therefore benefiting small businesses. However, Charles Martin, representing the 1,500-member Vermont Chamber of Commerce, gave testimony challenging that assumption, at least as to how it will affect small, rural businesses.

Wikimedia Commons/jeffreyw

Martin used his own experience at his family’s general store to illustrate the impact that a higher minimum wage would have on rural Vermont. He didn’t buy the argument that “people will start spending more because they will be earning more.” He noted that most of his parents’ customers came in once a morning to get a coffee and an egg sandwich. Even if those customers do end up with more money in their pockets after a wage boost, “people aren’t going to start buying five coffees and five egg sandwiches on their way to work.”

Stores like his will not benefit from increased spending, certainly not enough to make up for higher labor costs — but big box stores might. Stores like Walmart, Target, etc. have the national scale to absorb a wage increase (in fact, many of these stores already pay $15 an hour). And due to their large inventories of products and the nature of their customers, they would stand to benefit most from increased spending by low income workers.

Martin also testified to the unfairness of “a proposal to raise the state’s wage scale by 40 percent over the next few years, when most Vermont businesses will not see equivalent revenue increases to offset such cost pressures.” Nowhere in this legislation are the incomes of small business owners considered. If they are forced to pay their employees more, but revenues do not grow to match that increase, the business owners’ incomes will decrease. And, in most cases, these are not wealthy people.

According to Wallet Hub, Vermont is already the fourth most difficult state in which to start a business. Raising a small business’ expenses would make small business ownership even more difficult, and would increase the 20 percent chance that a Vermont startup would fail in the first year due to unforeseen expenses.

Martin said that “natural economic growth” should be the solution to wage increases, not government fiat. While this might not seem palatable to some politicians, “in the case of a small business in a rural town, those wages aren’t enough to have a joyful, carefree life. But if that general store folds, those wages will be nonexistent.”

Our legislators are counting on you to buy a bigger breakfast to support this small business expense hike. Will you do your part?

David Flemming is a policy analyst for the Ethan Allen Institute. Reprinted with permission from the Ethan Allen Institute Blog.

Images courtesy of Public domain and Wikimedia Commons/jeffreyw

7 thoughts on “Flemming: You’ll need to buy more egg sandwiches if $15 per hour passes

  1. If we reduce housing expense, get home ownership for $600 per month we cut people’s hosing expense in half, they build equity and we then built stronger more stable families. It would cost the tax payer nothing to implement, and would end up reducing state spending on affordable housing construction by 33 million this year and how many more million due to the fact the state is no longer subsidizing rent.

    Everyone wins except the crony, good ole boy network.

  2. Killing jobs for the young’ins and removing job slots for the poor working. Way to go leftards
    AGENDA over common sense every time for these flatlander leftist fascists..People are running
    away, business is running away and they just keep on exasperating the problem.

  3. As an added irony, who in Vermont can live on $15 an hour ? Not to mention how much less take-home actually is after taxes, even if you find a job that provides 40 hrs. a week of employment.

  4. There’s not a one Democrat in the House of Representatives will the senate in the state of Vermont that has the experience and small business that is necessary to determine what a fair wage is. And there’s also not one of them that understands the basic principles of economics and that is the supply and demand equation which works in the labor force as well. People will be paid what they are worth based on the market and any artificial intrusion is folly

  5. What many non business owners don’t realize is that many other costs are tied to the wage level, something that the business owner has no control over. Workers compensation, liability insurance, state and federal unemployment taxes, Social Security and Medicare, etc. are all based upon wages. Increase wages and every one of these taxes increase proportionally. Vermont is killing it’s small businesses, yet at the same time it is fighting to keep big business out. That is the liberal mind set and it must be destroyed.

  6. Sorry but Vermont is done……….there is no way we can come back from this mess created by the left………Vermonters are leaving in droves. Very sad……….

  7. Wow, According to Wallet Hub, Vermont is already the fourth most difficult state in which to
    start a business…….Montpelier the House of Doom !!

    And when the $15 wage is “Thrust ” upon us, even though most small businesses will be on
    the short end of that project…….. Another Liberal

    Wake up, People….. Tax, Tax, and more Tax !!

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