Here's an economy discussion from an individual who has never worked in business, but only the government sector.
“It was Adam Smith, the father of free-market economics, who
once said, “They who feed, clothe, and lodge the whole body of the people
should have such a share of the produce of their own labor as to be themselves
tolerably well fed, clothed, and lodged.”
And for those of you who don’t speak old-English -- (laughter) -- let me
translate. It means if you work hard,
you should make a decent living.
(Applause.) If you work hard, you
should be able to support a family.
Now, we all know the arguments that have been used against a
higher minimum wage. Some say it
actually hurts low-wage workers -- businesses will be less likely to hire
them. But there’s no solid evidence that
a higher minimum wage costs jobs, and research shows it raises incomes for
low-wage workers and boosts short-term economic growth.
Others argue that if we raise the minimum wage, companies
will just pass those costs on to consumers.
But a growing chorus of businesses, small and large, argue
differently. “
-Barack Obama, December 4, 2013
For this post, I am willing to concede that no solid evidence exists to prove that a higher minimum wage costs jobs.
I hear arguments going both ways, but do not recall many McDonalds or WalMarts shutting their doors when the minimum wage has been raised in the past.
Of course, smaller businesses certainly may have done so, and unless they were record stores, I may not have noticed.
It is the President's second point, about the "chorus of business" who claim that they will not pass their costs on to their customers, that this post is focused on.
Setting aside the lawsuits from the shareholders of these benevolent companies that give away their profits, let me ask our Resident Kenyan one question.
Would the masterminds at the helm of these businesses be the same geniuses who needed government bailouts recently?
You see, Mr. Obama, if a business fails to pass its costs on to its customers, it finds itself in the situation of having expenses that exceed its revenue.
Kind of like if your mortgage was more than four times your weekly salary.
That is not a good position for a business to find itself in. Unlike the Federal government (the ONLY business you are familiar with), when a REAL business spends more than it takes in, it can't just print money and sell debt to China and leave a whole lot of debt for future generations to worry about.
It actually has to come up with a business plan.
And banks frown on lending money to business people who are too stupid to cover their costs.
And even a non-profit who has expenses higher than revenue will find itself in a situation known as bankruptcy.
Or for the President, who obviously is not the sharpest tool in the shed, think of them as OUT OF BUSINESS.
