Elizabeth Warren Proposes Tripling Labor Costs for American Small Business

The headline could just as easily read, Elizabeth Warren Proposes Putting Every Small Business Out of Business. But on the Prog side, the headline of course is “Elizabeth Warren Suggests $22 Minimum Wage.”

Warren was billed as some kind of hard luck story, but I have to wonder if this woman has ever lived in the real world.

Sen. Elizabeth Warren, Massachusetts Democrat, suggested raising the minimum wage to $22 per hour is only logical if you look at the numbers.

“If we started in 1960, and we said [that] as productivity goes up … then the minimum wage was going to go up the same … if that were the case, the minimum wage today would be about $22 an hour,” the senator said

The current minimum wage is $7.25 per hour. Ms. Warren wondered: “What happened to the other $14.75?”

She answered her own question: “It sure didn’t go to the worker.”

Much of it went to the government which used it to pay six figure salaries to fake working class heroes like Warren. But let’s look at what raising the minimum wage to $22 would actually do.

It would triple labor costs for any minimum wage business. With labor costs running to between 25 to 35 percent at eateries and a lot of retail, tripling that would turn labor costs into the majority of business cost and would put many of them out of business.

“During my Senate campaign, I [frequently] ate a Number 11 at McDonald’s. It cost $7.19,” she said. “If we raised the minimum wage to $10.10 over three years, the price increase on that item would be to about $7.23. Are you telling me that’s unsustainable?”

Pocahontas is trying to show what a “Woman of the People” she is. But she doesn’t actually know that the majority of McDonald’s fast food joints are franchisees.

Franchisees have to pay a 45,000 dollar franchise fee back to McD’s plus 12.5 percent of sales. The price of meat keeps going up thanks to Obama’s environmental games. Here’s what a typical breakdown looks like.

Typically, food costs range from about 25%-28% of sales, while cooking oil and condiments cost 3%-4%. Labor costs vary from 25% to over 30%, not including management.

Now perhaps Elizabeth “Number 11″ Warren can explain how her McDonald’s franchise is sustainable now that it’s paying out 90% of its sales to the workers, not including management.

What exactly is going to go into her Number 11? Rat? Nope. They can’t even afford rat at that point.

But let’s stick to $10.10. McD’s will stay in business. Its labor costs will go up. It will raise prices, but not enough to compensate. Some franchises will fold. Others will cut staff and hours. There will be more poor people who will have less money to spend at McDonald’s. Everyone will be poorer and the economy will be flimsier, but those workers who hang on to their jobs will have a few dollars more, which they will save, rather than spend, because the economy is insecure.

Warren will demand more aid for the people. Taxes will go up. Businesses will close, etc, until there’s a government elite and a vast horde of the poor… and no middle class left.

And that is the new Democratic Party’s plan.

  • Edward Cline

    Warren's ulterior motive, which she shares with Obama and Reid and Franks and even pig-out Michelle is to make everyone poor and dependent on government for a "sustainable" or "sustenance" existence. And if we survive such magniminity, we'll be expected to be grateful, and reelect them back into the oligarchical rulling class. Then they can play Indian and golf with a clear conscience.

    • http://www.adinakutnicki.com AdinaK

      Oh yeah, as she moves into a swanky abode, everyone else can eat dirt, just like all the engorged leftists, aka limousine liberals.

      Never mind. I am hip to their jive talk. I know what it takes to run a small business and to make it work. Been there, done that and VERY successfully. Tripling, even doubling labor costs is a job killer and this is a fact, as well as their plan. One cannot rule over people who are non-dependent – http://adinakutnicki.com/2013/02/15/u-s-leaders-f

      Adina Kutnicki, Israel http://adinakutnicki.com/about/

  • JacksonPearson

    “The real minimum wage is zero: unemployment.”
    – Thomas Sowell

    The minimum wage is one of the most persistent and pernicious economic policies, probably only surpassed in ineptitude by rent controls and farm subsidies.

    Economists have recognized for decades that minimum wage laws result primarily in increased unemployment among the most vulnerable sectors of society, specially poor unskilled teenagers of racial minorities.

    The amount of evidence to back this is huge, but still people refuses to accept that just because it sounds like a good idea to magically give poor workers a raise it doesn’t mean that it actually works this way.

    Ironically the main groups that consistently lobby to raise the minimum wage are unions of skilled workers that already earn much more than the minimum wage, and big business in the retail market who offer salaries slightly above the minimum wage.

    This unholy union of unions and big business can be explained if one looks at the real consequences of raising the minimum wage: unskilled workers that might be able to compete with unionized workers thanks to their lower salary are put out of work safewarding the jobs of the well off unionized workers. At the same time small retail business that have very small margins are driven into bankruptcy by big corporations that take advantage of economies of scale and can afford to pay their workers salaries slightly above the minimum wage.

  • Elaine

    The $7.25 is the federal minimum wage. Many states pay way more than that.

    Even worse than Ms. Warren's stupidity is the fact there even is a force minimum wage. Where is it in the Constitution that says the federal government can set a minimum wage? When are people going to begin responding to these idiots by asking the important question, where does the Constitution give you the authority?

    • objectivefactsmatter

      "When are people going to begin responding to these idiots by asking the important question, where does the Constitution give you the authority?"

      They think they can vote on anything they want. They can vote away all of your rights if they feel like it. They just need a clever cover story.

      • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

        If the questions are asked, it will have to be from us the people.
        Journalists sure haven't remembered how to ask anything worth asking.

        • objectivefactsmatter

          "Journalists sure haven't remembered how to ask anything worth asking."

          Not the ones given access. They sold out or they wouldn't have access. Forget the "military industrial complex," I'm worried about the socialist government media complex.

    • pagegl

      Typically, the lefties use the Commerce Clause and the Necessary and Proper Clause to justify this. I seriously doubt the founders would have considered using those clauses as do the leftists. But hey, to the leftists it sounds like they know the Constitution and its intent.

  • Brian

    Ms. Warren is the female Obama. Ms. Warren is clueless. Raise the minimum wage, therefore the price of the product will skyrocket and no one will buy the product. Ergo the company will go out of business. Ergo the government won't get the taxes and Ms. Warren will not have a job. If that's her plan then she is on the right track.
    How about if we have to triple wages, we cut all the politicians and government employees salaries to a third of what they make?

    • beez

      Actually she's a second female Barack Obama.

  • tanstaafl

    Why hasn't Ms. Warren met with the representatives of the Cherokee Nation?

    • Mary Sue

      …because they'd know a phoney when they see one? She who born with silver spoon in mouth speak with forked tongue!

      • beez

        Yep, Squaw's minimum wage getting to be big wampum, Kemosabe.

  • patron

    Wages have flattened as costs for benefits and insurance skyrocketed since the 1960s due to a jihad of scum bag thieving personal injury lawyers defrauding US courts to make their own millions.

    Elizabeth Warren quickly climbed on top of the pile of dead businesses to win the crown of their brood queen.

  • objectivefactsmatter

    “If we started in 1960, and we said [that] as productivity goes up … then the minimum wage was going to go up the same"

    Has the productivity of the minimum wage worker gone up? It has probably gone down.

    These people are so stupid with their Marxist collectivism.

    • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

      This sounds like something Valerie Jarrett has dreamed up while channeling Alinsky in the lincoln bedroom.

      • objectivefactsmatter

        "This sounds like something Valerie Jarrett has dreamed up while channeling Alinsky in the lincoln bedroom."

        They are entering the realm of nearly perfect delusion.

  • kafir4life

    Does anybody really listen to anything that Chief Lying Sack has to say?

    • Steve

      We are reading but I doubt we are listening. I wonder when we will become a 3rd world country

  • Ar'nun

    The fact is the Left every once and a while slips up and shows why their views differ so much from intelligent people. They believe the best thing in the world is a prosperous country. Prog heroes like Krugman believe the Government becomes richer; it's how they justify things like stimulus and shovel ready projects.

    On the Right, we prefer wealthy individuals. Anyone who wants to be wealthy has a chance to be wealthy, and through hard work and sacrifice can make it happen. But if Individuals are wealthy, this stands in the way of the wealthy government. If Republicans learn how to expose and explain the difference in these strategies, game over for Progs.

  • Titus Moody

    We voters of Massachusetts are the smartest of all the 57 states.

    • Steve

      57 states? Can you please name them all for me?

      • Titus Moody

        Look 'em up fer yisself, bub.

        • pagegl

          Steve needs to get Obama to list them.

      • Fred Allen

        You seem a little slow, Steve, so I'd better explain things to you for the laconic, New England old-timer, Mr. Moody, who, I am sure, wouldn't mind.

        It was President Obama, remember, who first mentioned. 57 states of the United States of America. That was real stupid of him, wouldn't you agree?

        I know Mr. Moody would agree. In fact, that's why he repeated it. It is indeed stupid. The remark of an utter dumbbell. Mr. Moody is being sarcastic.

        He's saying Massachusetts voters are stupid for voting for Elizabeth Warren. Get it?

  • Questions

    Actually, the $7.25 minimum wage has limited applicability. About half of all states mandate a higher minimum. And more than 100 cities, counties and campuses across the U.S. have enacted "living wage" ordinances/by-laws requiring wages and benefits that now equal anywhere from $12-$18/hr.

    What's more, studies over the years repeatedly have shown that the vast majority of people paid the minimum wage are secondary wage earners within a household – typically teens, college students or wives taking entry-level jobs –and often work part-time. Most, if they stay on the job for more than a half-year, get a raise.

    Our newest Massachusetts senator overplays her populist hand — and not for the first time.

  • geoplaten

    "And that is the new Democratic Party’s plan."

    Nothin' new about it, it's been the plan for decades.

  • Drakken

    Thank you the people of Mass in electing this effing moron, it shows how much we are in bad shape as a nation. God help us!

  • Rifleman

    Raising the minimum wage to $20+/hour would provide an economics lesson that only the dumbest Americans would miss. $100 pizzas and $20 hamburgers would quickly show wages are relative, and end that dp issue for a generation or two. It's remarkable that this fool has tenure at a university.

    • Tondaleo

      Unfortunately, It's NOT surprising at all , that this idiot has tenure. "Higher Education" is full of nit-wits like this.

  • Ben Jabo

    Warren must set the example by tripling the wages of her own office staff___

  • Brujo Blanco

    This is just another action to intentionally tank the economy. Many small business would have to immediately shut their doors and quit. Warren reminds me of a guy that shoots himself in the foot to see if it really hurts. Then after firing the shot he does not know why he is in such pain. For every action their is an equal reaction.

  • Guy Macher

    Heap stupid! Indian know if whiskey man get heap wampum from whiskey boss, Indian pay heap more wampum for whiskey,

  • ColdGold

    Anyone here able to show me the cost of a hamburger at $15 per hour? I have seen $.15 at $1 (15%) in 1963 through $.89 at $7.50 (12%) in 2013 so could I expect a $1.50 hamburger, if I want a living wage of $15.00 for food service workers. Seems cheap enough. $.11 fries are now about $1.25 and $.10 drinks are now $1.50.