Can we afford to keep raising the cost of doing business?

Those who don’t understand the free-market model or even care to because they hold a redistributive world view, will not care why businesses require profits. The divisive “evil-rich” or “greedy-profiteer” smears are lies told to the gullible masses who do not know what businesses require to keep going or even more importantly, how it must grow to be viable. So it’s easy to fall for the class-envy rhetoric which is sadly destroying the American Dream.

Government is a consumer of tax revenue paid by big and small private sector businesses and individuals who work for a living. In fact government produces nothing. It spends our money ostensibly to provide us services. Which in today’s bloated Monster Government, we’re actually working for our “slave-master,” because much of our working life is devoted to paying taxes. When the White House and those in Congress engage in class-warfare, and use government to pit Americans against Americans in order to extract more taxes. We as tax payers, are quite literally funding the assault on our own liberties.

When government mandates businesses to pay more in wages regardless of the actual fair-market values of “minimum-wage” labor, it artificially forces businesses to increase operating overhead. Anyone who’s ever run an enterprise knows increasing overhead costs adversely effects products and services they provide their customers. When costs go up, one of four things must happen: 1) cost of your goods or services to your customer goes up; or 2) the quality of your goods or services goes down; or 3) cut workers’ hours or impose a hiring freeze; or 4) cut profits or operate at a loss.

The big government pushers believe businesses are greedy and can always afford wage increases. ‘Look at the rich owner’s Mercedes; he needs to spread the wealth around.’ They would say. The reality is when you increase the wages of minimum-wage workers (or entry-level jobs that should be determined by the free-market) that means, for example, the low cost food services, who’s customers are those who can’t afford fancy restaurants, will have to buy food at higher prices or lower quality. So those who can’t afford caviar will now be penalized by the government mandate.

If the owner keeps the price the same and lowers quality to try and survive, they’ll lose customers because of bad burgers. Eventually they will lose their business anyway from a lack of patronage. Alternatively, he can freeze hiring or cut workers’ hours, but that of course hurts his employees. Then there’s the option of operating at zero profit or at a loss. Now, try to keep up with inflation – another government caused disaster. The landlord certainly won’t stop raising the rent and eat his tax hike and his suppliers are also subject to inflation as well.

By imposing more mandates like raising the minimum wage, the government makes burgers unaffordable, and puts shops out of business. But wait, aren’t the people who want to raise the minimum wage the same ones who blame businesses for sending jobs overseas? So, you’re not allowed to make a profit, that’s greedy, but you’re supposed to sustain your business because you must have some hidden profits you’re not telling the government. So government forces you to operate at a loss so entry-level workers gets a higher wage because that’s what’s “fair?” And we haven’t even touched on the deleterious effects on business of the unaffordable Affordable Care Act best known as Obamacare.


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Filed under Opinion, Politics & Economics

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