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JERSEY CITY, N.J. -- Last night, President Barack Obama declared this year a year of action. That might be good news for those who believe that Big Government and continued spending is what’s needed to turn around our struggling economy. But for most of the retail industry, the heavy hand of government regulation and higher taxes is a fearful specter that threatens the health of their businesses -- which are already beset by over-regulation and increased administrative burdens.
In Tuesday night’s State of the Union address, President Obama proclaimed: “Wherever and whenever I can take steps without legislation to expand opportunity for more American families, that’s what I’m going to do.”
Of course, he didn’t mention that it was his administration’s policies that have kept so many Americans without jobs or under-employed. Take his proposal that employers “give Americans a raise.” Like a lot of his rhetoric, it sounds good, but falls short in the face of reality. Most employers are already struggling with higher costs, increased red tape and rising health insurance expenses.
National Retail Federation (NRF) President and CEO Matthew Shay was just one industry spokesperson to react to the President’s executive order to increase the federal minimum wage to $10.10 per hour for workers on new government contracts and ask Congress to approve the same increase for all workers.
“If you want to create minimum opportunities, then raise the minimum wage,” said Shay. “We welcome the President’s focus on the economy and jobs, but a minimum wage hike runs counter to that goal. Raising the minimum wage would place a new burden on employers at a time when national policy should be focused on removing barriers to job creation, not creating new regulations or mandates. It’s simple math -- if the cost of hiring goes up, hiring goes down.”
Shay went on to say: “Fewer than 5 percent of hourly workers are paid the minimum wage. It’s really a starting wage that allows teenagers or others with little job experience to enter the workforce. A mandated hike in labor costs would negatively impact businesses that employ people in entry-level jobs and ultimately hurt the people it is intended to help. This isn’t economic theory -- when the minimum wage went up in 2009, half a million part-time workers lost their jobs. That’s a risk our economy can’t afford to take.”
Nevertheless, Obama thinks employers will find a way to increase wages for their employees without the benefit of increased productivity or higher sales. Too bad employers can’t just print money like the government does.
The idea that Obama could use executive orders on a whole host of matters -- from energy policy to labor relations to food safety -- is scary for the convenience store industry.
Unfortunately, the President’s GOP opposition hasn’t been able to effectively communicate to the American public a bold vision for securing the nation’s economic future. But any vision not rooted in free enterprise, equal opportunity (not government-enforced equal outcome) and empowerment of the individual rather than the tactics of socialism, is doomed to fail -- in my humble opinion.