The minimum wage’s effect on business

>>> lew, you are the most for kind of person in america . you are a small business owner.

>> job creating genius.

>> exactly. you actually met with the president along with mall business owners. my understand sing that this came up specifically minimum wage .

>> yes.

>> this is why i was shocked when it showed up in the -- state of the union because i -- i have to admitted i take a very cynical attitude through -- towards these kind of events. i just assume they are photo-ops. show trials for tv. the -- president sat down in the room and -- with a dozen small business people. and literally said what can i do for you? the first thing that one of us said, the guy that was owns uncommon goods in brooklyn, raise the minimum wage to ten bucks. in unison the other dozen of us said yeah.

>> this was not a -- randomized focus group of small business owners. people that supported the president. there's some -- i just want to make that very clear.

>> they seemed surprised. we gave them the reasons. it is exactly what he said in the state of the union . which is putting 300 bucks a month in the hands of the customers is the best economic stimulus the country can have and that money tends to get spent in the businesses more than my other.

>> you guys have done a lot of work on raising minimum wage locally. where does the political resistance tend to come from. it polls extremely well.

>> extremely well. you know. there was a poll last year that found that 74% of likely voters supported raising the minimum wage , includi wage. opposition is not among the american public. we are working with 16 state campaigns to raise the minimum wage . some of them pushing $10, $11 minimum wages . it is not with the public. i mean, it is -- you know, the public see what $14,500 a we are for a pull-time worker means. they see the cost of living is increasing and the minimum wage isn't following suit. they see that, you know, over the last 40 years of the minimum wage kept pace with inflation it would be $10.55 an hour today. they see the fact our economy has dramatically shifted so we are, you know, core of our labor market is low wage work. service sector work. jobs that pay, you know, barely $10 an hour. retail, child care . home health care . food prep. these are the jobs that growing in our economy. you know. the good paying jobs of yesterday have gone and a lot of them are not coming back. the public sees all of this. and so they -- that's why they support raising the minimum wage by so much. where is the opposition? you know. it is with lawmakers.

>> also, interest groups.

>> yes. let me say i was doing a lot of reading on minimum wage and sort of where people fall on this. i could probably, you know, yesterday i saw -- talking to an economist who was telling me -- he's not really republican or democrat. he was just -- telling me that when you raise the minimum wage , then inflation goes up. then you raise the minimum wage and inflation goes up and you raise the minimum wage . i said well, how does that affect -- well, let's sma one working at mcdonald's, minimum wage , they pass the, you know, price on to the consumer. so -- again, i can -- we can probably get, you know, 50 economists on either side telling us why it is good or bad. then also businesses like you say --

>> you won't get a business owner that says that. the -- portion of wages, that is -- in my cost, is actually relatively small and even -- even in the manufacturing and a whole lot of areas. it is relatively small. my overhead is complicated and large. and -- the minimum wage -- the wage, is actually mall part of it. prices in america , this is -- you know, great secret. prices in america are not set by the cost of making something or doing something. prices are set by what market research tells most companies you are willing to pay. ten bucks at yankee stadium is not because --

>> of course not.

>> get it there to the bar across the street where it is two buck.

>> and one of the interesting things here about -- this in terms of -- i want to talk about this inflation argument. will are two arguments republicans tend to make against it. i want to play marco rubio making one of them. one of the interesting -- interest aspects of the research i found was the surprising result that you have found -- others have found, i should say there is research new mark line of research which is against this. right? which says it does have a -- disemployment effect. in the -- the research found there is not a negative employment effect, one of the things then found is the factors of the -- cost factors in a business are so multi-variable and some spike all the time that businesses are actually pretty used to encompassing large price spikes whether it is in -- commodity sources or things like that and is actually -- dished channels to deal with it inside the firm that end up meaning you don't have this. i want to hear about that and the inflation argument and political