$15 Min Wage Advocate Admits Job Losses, But..

By David Flemming

On September 6, state legislators on the Minimum Wage Study Committee heard from Ellen Kahler, Executive Director at the Vermont Sustainable Jobs Fund – an advocate in favor of the $15 minimum wage. Kahler suggested that if Vermont’s small business owners were just smarter and worked harder, they could afford the proposed massive increase in wages.

Kahler began her testimony with a chart showing the average size of firms in Vermont. “Vermont is very much a state of small businesses. 90% of all Vermont Firms have fewer than 20 workers.” Such a statistic should give legislators pause. Vermont is not a state of large corporations that are able to readily absorb increased labor costs. Ours is a state of Vermonters employing their neighbors and family in ventures that don’t generally have large profit margins.

Jobs Chart for Blog

Kahler acknowledged the possibility of the minimum wage causing small business owners to reduce hours, lay off workers, increase prices, or see a fall in profits that could potentially lead them to go out of business.

But, she downplayed these risks. Why?

Kahler argued that businesses are exposing themselves to these likelihoods because they “aren’t pricing their products correctly (and) they aren’t thinking strategically.” In other words, they’re not charging their customers – us – enough, and the owners just aren’t smart enough to see the big picture potential of their own businesses.

But bureaucrats are and can! Kahler believes that pouring money into “small business development centers,” government funded organizations that show small business owners ways to improve their businesses, can overcome this challenge. According to the Vermont Small Business Development Center’s website, this program receives funding from the State of Vermont’s Agency of Commerce and Community Development. In other words, government would charge taxpayers more money to foot the bill for paying government agents to advise shop holders to charge those same taxpayers more for their goods and services. Sounds like someone’s getting the short end of the stick here.

But, even if taxpayers could be convinced to pay up, more government funded development centers are unlikely to be the answer because, Kahler admits, many small business owners are too busy “putting out fires” and “working 12-hour days” to consider strategies from experts. So, taxpayers are being asked to fund a program that advocates recognize is underutilized, and yet somehow believe will counter the negative effects of a $15 minimum wage. Okay, then.

The risks of imposing a minimum wage on Vermont’s small businesses are numerous and serious: reducing hours, laying off workers, raising prices that could drive customers away, and ultimately, the possibility of business foreclosure. The prospect of Vermont businesses countering the damage from a higher minimum wage by somehow increasing their productivity using the strategies suggested by an army of taxpayer-funded government bureaucrats is far from assuring.

- David Flemming is a policy analyst for the Ethan Allen Institute.

{ 4 comments… read them below or add one }

H. Brooke Paige September 8, 2017 at 7:52 pm

In the “Land of Endless Taxes” anything and everything is possible. You just “gotta” love these pointy head intellectuals, who never have done an honest days work, telling business persons who are working 12-15 hours a day (often 7 days a week) to keep their heads above water how to run their businesses. And the profound advise that will allow these folks to pay some self-centered, self-congratulatory millennial 15 dollars an hour – “Raise Your Prices and Think Strategically !” GREAT !

Reply

Tom September 8, 2017 at 9:36 pm

well as payroll goes up small businesses will all so have to pay more in workers comp.could make the $15 an hr be $21 an hour. nobody is thinking about the extra coast of workers comp

Reply

Jim Bulmer September 9, 2017 at 12:39 am

Vermont is a state of small businesses? My guess is that there’s a direct corolation between Vermont’s unfriendly business climate and the number of large high employment firms in our state.

Reply

James Hall September 9, 2017 at 3:45 pm

You are so right!!!!

The mind boggler here is why all these intellectuals, that know what’s best for us, do NOT get it!!

Reply

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