As President Barack Obama reignites the debate over the minimum wage in the U.S., a largely speculative and totally predictable media analysis of the potential fallout from such an action followed. Analysis from across the spectrum of public opinion has ranged from dire warnings of its small business-killing potential to the more optimistic historical analysis of actual outcomes of past wage hikes.
Despite this hotly contested issue, everyone seems to agree on one thing — small business has played an essential role in the development of the U.S. But how are we defining small business, and what aspects of small business are we trying to protect?
Those businesses which have historically played an indispensable role in the growth of the U.S. are those which were created on the principles of innovation and ingenuity, not simply wealth creation by an investor. Businesses which require nothing more than an infusion of money and the ability to follow a pre-packaged business plan are not vital to the American economy and do little to create products or workers that will compete in a global economy.
Business investors who are only looking for a return on their investment will walk away from a business at the first sign of distress not because of the lack of solutions, but because those solutions require creativity and ingenuity which that business owner does not possess.
Business is not a stagnant concept. Simply creating a business does not ensure long-term viability. The reality is that businesses developed through innovative approaches and unique products will continue to problem solve and evolve in the face of adversity in order to maintain a viable business plan. Changing costs, economies and other unforeseen hurdles are par for the course in business, not something that should be avoided through legislative oppression of these factors.
As an example, there are few people who would agree that sweat shops are part of a viable business plan. It not only leads to low-quality products arising from a lack of invested workers, but it is morally and ethically questionable.
So why have American citizens been forced to bear the brunt of faulty business planning by lowering the costs for their employers through unfair wages and benefits? Is the current American minimum wage really all that different than the use of sweat shops?
While the American Dream has always been the driving force behind small business creation, does the right of one individual or group to make large financial gains because they have money to invest trump the right of working Americans to earn a living wage?
If any business relies on its workers — regardless of how unskilled or uneducated — for the success of its business plan, then those workers should be paid accordingly. If a business is not viable without its lowest paid workers, then the value of those workers should be compensated or the business should cease to exist.
In the media, much emphasis is placed on the wealth creators — those who infuse companies with money and claim to create jobs and opportunities for those below them on the economic scale. But without low wage workers, many businesses would fail and investors would cease to amass their fortunes.
In other words, who comes first in the wealth creation process — the worker or the investor?
Perhaps Americans need to re-evaluate the importance of the lowest-paid workers in society. Millions of employees play a vital role in the wealth creation process of investors. So instead of insulating those with ineffective business plans by allowing them to continue to pay workers poorly, perhaps we should start rewarding those business owners who have viable business plans that aim to benefit all members of society through innovative products and living wages for all of their employees.
Reach the columnist at dprobst1@asu.edu or follow her on Twitter @DonnellProbst
Editor’s note: The opinions presented in this column are the author’s and do not imply any endorsement from The State Press or its editors.
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