Many businesses in America, large, medium and small, are operating on shoestring budgets. As Obamacare began to kick in, hundreds of businesses began laying off staff to offset the increased costs they face under Obamacare. Consequently, thousands of people have lost their jobs, thanks to Obama and his Affordable Care Act.
Hundreds of other businesses, especially many small businesses have had to drop health benefits for their employees as they can no longer afford the higher premiums. Consequently, thousands of Americans who still have jobs have lost their employer provided healthcare plans. The vast majority of these employees cannot afford to purchase their own health insurance because the Affordable Care Act has driven prices beyond what is affordable. Consequently, thousands of Americans are finding themselves uninsured.
Then there are all of the tax increases that took effect this year that are also hitting business owners hard. If a business owner makes $250,000 or more a year, they are facing combined tax increases of 6%-10%.
So you have business owners paying more for employee health coverage and more in taxes. However, their revenue intake is not increasing, which means this all comes off their already thin profit margin.
Now President Obama wants to add a third financial burden onto the already weakened shoulders of business owners. He wants to increase the minimum wage from $7.25 per hour to $9 per hour. If you’re an employee making minimum wage, this sounds great. That means you will earn $70 more per week or $3,640 more per year.
Obama claims raising the minimum wage will help eliminate poverty, but it won’t. In reality, it will cause more businesses operating with a very thin profit margin to either cut more jobs or close their doors. Either alternative means more people losing their jobs. If they weren’t part of the poverty class then they soon will be.
Have you ever heard the expression ‘three strikes and you’re out?’ If Obama gets his way with the minimum wage increase, many business owners will be getting their third strike. First, increased costs of Obamacare. Second, increased taxes. Third, increase wage costs.
All I can say is be prepared to see more going out of business sales and signs followed by more empty buildings. More empty buildings means less rent income for the landlords, so they have to take action to cut costs and more jobs are lost. The more empty buildings, the less sales and service from other companies and they will also have to take action and reduce staff.
Remember the move, The Perfect Storm, starring George Clooney, Mark Wahlberg, Diane Lane and Mary Elizabeth Mastrantonio? Three different storms merged to form one huge storm that ended up claiming the crew of the swordfishing boat, the Andrea Gail. Americas’ businesses are about to get hit by their own perfect storm, the combination of three significant cost increases. Like the Andrea Gail, many businesses will not be able to weather this perfect financial storm. They will flounder, fill up with costs that can’t be met, and sink out of sight, all due to the economic policies of President Obama.