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Rep. Ro Khanna (D-CA) was born in Philadelphia, PA in 1976, went to Chicago Law School. His father was a chemical engineer and his mother a substitute teacher.
During his entire working career, including his time in school, Khanna worked in law and politics--he has never owned a small business nor, as far as one can tell from his Wikipedia bio, he, like President Biden, has never been in the position to hire or fire an employee of a company or small business.
On Feb. 21, 2019, Khanna was named a national co-chair of Bernie Sanders' 2020 presidential campaign.
On Sunday, Khanna told CNN's "Inside Politics" that we shouldn't want "low-wage businesses" when asked about how they would struggle under a federal $15 an hour wage mandate.
So if we eliminate small businesses that could not afford to pay its employees $15 an hour, that would mean that 47.3 percent of the U.S. private workforce, or a little under 60 million people, might be out of work, if all small businesses had to close. Of course, it would never be that many people out of work because some small businesses would be able to survive by cutting staff and raising prices, but the number would be staggering--in the millions.
For politicians who have never run a business or had to terminate an employee, it seems better to them to increase wages on all staff that still have jobs, than to take away the millions of jobs that can be replaced by machines, or people willing to work harder to stay employed. Even the big box stores like Costco have automated checkout machines for this reason.
But Khanna never ran a small business and he seems to believe they aren't all that important to the nation. Perhaps they're important to the 60 million people who work in small business environments.
The nonpartisan Congressional Budget Office predicted raising the federal minimum wage to $15 an hour by 2025 would cost 1.4 million Americans their jobs over the next four years.
I believe that number is low.
CNN anchor Abby Phillip said, “I know that you feel very strongly like many progressives about the minimum wage issue. Right now, at the same time, businesses, both large and small, are struggling in this pandemic economy, more than 9 million jobs have been lost in the last year, and they still aren’t back, and the problem is particularly acute in industries like retail and foodservice, which are more likely to pay minimum wage. I think the question that a lot of Republicans are posing and perhaps some moderate Democrats is timing. Is now the right time to increase it to $15? I should say the bill has stages, of course, but immediately it would go up about 30% right now. Is now the right time to do that?”
Perhaps a better question might be: why must there be a minimum wage if the free market will adjust itself based on a person's merits?
Khanna replied to CNN's host, “Abby, it’s absolutely the right time to give working Americans a raise. Let’s look at the facts. Amazon raised their wage to $15 nationally, not regionally. They have more jobs today. It didn’t hurt job creation or business. Target followed. They also did it nationally, more jobs.”
Phillip said, “Large businesses like Amazon and McDonald’s, for example, can and perhaps should pay more, but I’m wondering what is your plan for smaller businesses? How does this, in your view, affect mom and pop businesses who are just struggling to keep their doors open, keep workers on pate roll right now?”
Khanna said, “Well, they should be doing it by paying people low wages. We don’t want low-wage businesses. Most successful small businesses can pay a fair wage. If you look at the minimum wage, it increased with worker productivity until 1968, and that relationship was severed. If workers were actually getting paid for the value they were creating, it would be up to $23. I love small businesses, I’m all for it, but I don’t want small businesses that are underpaying employees. It’s fair for people to be making what they’re producing. I think $15 is very reasonable in this country.”
Khanna replied to CNN's host, “Abby, it’s absolutely the right time to give working Americans a raise. Let’s look at the facts. Amazon raised their wage to $15 nationally, not regionally. They have more jobs today. It didn’t hurt job creation or business. Target followed. They also did it nationally, more jobs.”
Phillip said, “Large businesses like Amazon and McDonald’s, for example, can and perhaps should pay more, but I’m wondering what is your plan for smaller businesses? How does this, in your view, affect mom and pop businesses who are just struggling to keep their doors open, keep workers on pate roll right now?”
Khanna said, “Well, they should be doing it by paying people low wages. We don’t want low-wage businesses. Most successful small businesses can pay a fair wage. If you look at the minimum wage, it increased with worker productivity until 1968, and that relationship was severed. If workers were actually getting paid for the value they were creating, it would be up to $23. I love small businesses, I’m all for it, but I don’t want small businesses that are underpaying employees. It’s fair for people to be making what they’re producing. I think $15 is very reasonable in this country.”
If I forgot to mention it, Khanna has never run a small business nor grew up in a home that did.
When a high school kid wants to work and make some money delivering pizza, for example, it may be impossible for a pizza store to pay him or her the minimum wage that socialists like Khanna and Bernie Sanders think is fair. And as minimum wage increases, so does the cost of pizza and everything else.
But small businesses are the backbone of this country and to shrug them off in favor of the big corporations only makes sense to politicians because that's where their donations come from.
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