The Washington Times reported yesterday that Sen. Elizabeth Warren (D-MA) wants to raise the minimum wage to $22 per hour. For entrepreneurs and small business owners already struggling to make payroll and conform to the demands of the Patient Protection and Affordable Care Act (PPACA), also known as Obamacare, this proposal could effectively kill small business as we know it.
In the same article, University of Massachusetts - Amherst assistant professor Arindrajit Dube suggested that the minimum wage be increased to $33 per hour, based on inflation.
According to Legal Insurrection, Warren's figure would only be true if the productivity gains from minimum wage workers kept pace with the productivity gains of other workers. Warren's figure was chosen from the highest possible number in a study entitled "The Minimum Wage Is Too Damn Low."
As FrontPageMag.com so succinctly puts it in their article, "It would triple labor costs for any minimum wage business." That would effectively put the entrepreneurs, the small businesses and the mom and pops out of business. Many of them are the restaurants, retail stores and other small enterprises that rely on minimum wage labor, such as college students, to keep their businesses open.
Over at FrontPageMag.com, the author breaks down what will happen to these enterprises if the minimum wage is increased, including the McDonald's franchises owned by entrepreneurs. It's not a pretty picture; it's a series of price increases and empty buildings where people once grabbed a quick burger.
What seems to be missing from the news are the entrepreneurs that are just starting out, that are just expanding to hire one or more employees. Those will be hit the hardest as they struggle to turn profits.