As Democrats continue to push for an increase in the federal minimum wage, business leaders warn of the economic consequences. Last year, House Democrats passed a bill to raise the minimum wage to $15 an hour (it went nowhere in the GOP-controlled Senate), and now Democratic presidential candidates are proposing similar plans. Sens. Bernie Sanders and Elizabeth Warren have competing $15 an hour proposals, and billionaire Tom Steyer is promising a $22 an hour minimum wage if elected to the White House.
Former McDonald's USA CEO Ed Rensi recently joined Fox Business Network to discuss these proposals. Rensi believes Democrats have a fundamental misunderstanding of the purpose of the minimum wage. "The minimum wage is not a living wage, it is an entry-level wage for those who have very poor job skills, who need to learn," said Rensi. "You would think by now that they'd understand that the entry-level worker making minimum wage should progress through mentoring and training into other jobs."
In particular, Rensi singled out Steyer's $22-an-hour minimum wage proposal. "A 22-dollar minimum wage means that a current 4-dollar hamburger is going to be 9-10 dollars...it's absurd," he told Fox Business. "It's inflationary, it's a job-killer, and it's very depressing to small businesses."
Rensi predicts that if the Democrats' minimum wage proposals become law, small businesses will have to raise prices, cut jobs, or shut down altogether. "Small businesses are the biggest generator of jobs in the United States on an ongoing basis," he says. "Why throttle them?"