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Businesses Are Shutting Down Due to Lack of Workers!!!
#31
What some people fail to realize is that small businesses are the backbone of America. If we lose them, we're really screwed. In many, many ways. Small businesses are defined as having 500 or fewer employees. They account for 99% of all of the businesses in the US. So great if Amazon, Walmart, Target, and McDonald's survive. They don't have a great track record of treating employees well. They pay little to no taxes either unlike small businesses.

https://www.jpmorganchase.com/institute/...businesses.
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#32
(08-09-2021, 09:30 PM)ss20ts Wrote: What some people fail to realize is that small businesses are the backbone of America. If we lose them, we're really screwed. In many, many ways. Small businesses are defined as having 500 or fewer employees. They account for 99% of all of the businesses in the US. So great if Amazon, Walmart, Target, and McDonald's survive. They don't have a great track record of treating employees well. They pay little to no taxes either unlike small businesses.

https://www.jpmorganchase.com/institute/...businesses.


Small businesses contribute a lot to GDP but not so much to taxes when you're looking at direct taxes. They employ a lot of people, so they are withholding income tax from people's checks; that's how they contribute to the country's revenue. However, only 19% of small businesses have employees as of 2020. In other words, 19% of small business are responsible for employing 47% of the workforce. 

Sole proprietorships result in paying more in taxes because the business income is reported on the sole proprietor's 1040, and the top individual tax rate is 37%. A plurality of small businesses are sole proprietorships. The corporate tax rate is 21%. LLCs can choose to pass through income to a member(s) who reports the business income on their 1040; this results in a lower tax rate than the corporate rate because of the 20% pass-through tax deduction passed in 2017. LLCs can also choose to be taxed as a corporation. 

Some definitions say that a small business has up to 500 employees while SBA says that a small business has up to 1,500 employees. The mid-sized businesses that are categorized as small businesses (I'm referring to those that have around 500 employees) aren't always as small as people might think. I've worked with these types of businesses, and some of them have tens of millions in profits. I once had a case with an oil and gas company located in this fancy business tower. The executives were in designer suits. They were classified as a small business because they didn't have many employees. My division only deals with the self-employed and small businesses. You're either classified as a small business or a large business, so the small businesses can get quite large. There are national chains classified as small businesses. 

What employers cannot get out of is paying the employer's portion of the payroll tax. It doesn't matter if you're Walmart or Amazon. If you have employees, you are paying the employer's portion of the payroll tax. For-profit companies also pay an unemployment tax. Some small businesses will try to get around this by illegally classifying employees as 1099 contractors. 

Most of the tax money that is collected altogether at the federal, state, and local levels comes from taxes businesses collect on behalf of the government e.g. W-2 employee income taxes, sales taxes, excise taxes, and employee's portion of Social Security and Medicare tax. These are called trust fund taxes because they're collected from customers and employees and remitted over to the government. The U.S. is not that dependent upon business income taxes or self-employment tax. It is very dependent upon the individual income tax, which accounts for almost 50% of tax revenue. 

In 2020, 55 profitable corporations paid no federal income tax (they still paid payroll tax). There are close to 2 million C-Corps. The average effective tax rate is usually close to the actual tax rate despite all the news stories about a handful of Fortune 500 companies paying little to no taxes. 

https://taxfoundation.org/businesses-pay...n-america/

Around 93% of McDonald's locations are franchises. These are mostly small businesses. When I got my paycheck from McDonald's, it didn't come from McDonald's. It came from the small company that owned three locations. I think that's something many people don't know. Franchises are included in the small business count as long as they meet the definition of a small business. There are over 750k franchises, and they employ approximately 8 million people. That's about 13% of the small business workforce.
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#33
(08-09-2021, 06:51 PM)Pats20 Wrote: Minimum wage is meant for supplemental Income or starting out. It was never meant to be a livable wage.

FDR Wrote:The law I have just signed was passed to put people back to work, to let them buy more of the products of farms and factories and start our business at a living rate again.

[...]

In my Inaugural I laid down the simple proposition that nobody is going to starve in this country. It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By "business" I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level-I mean the wages of decent living.

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#34
(08-10-2021, 07:50 AM)Flelm Wrote:
(08-09-2021, 06:51 PM)Pats20 Wrote: Minimum wage is meant for supplemental Income or starting out. It was never meant to be a livable wage.

FDR Wrote:The law I have just signed was passed to put people back to work, to let them buy more of the products of farms and factories and start our business at a living rate again.

[...]

In my Inaugural I laid down the simple proposition that nobody is going to starve in this country. It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By "business" I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level-I mean the wages of decent living.

http://docs.fdrlibrary.marist.edu/odnirast.html

When FDR signed the law, it only covered about 20% of jobs.  Only 20% of jobs were considered to be ones where people were expected to make a "living wage."  The other 80% were not.
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#35
(08-10-2021, 10:41 AM)dfrecore Wrote: When FDR signed the law, it only covered about 20% of jobs.  Only 20% of jobs were considered to be ones where people were expected to make a "living wage."  The other 80% were not.

There were two laws. I posted a quote about the NIRA, which was ruled unconstitutional a few years later. It was replaced by the FLSA. I was pointing to a single statement, that "Minimum wage is meant for supplemental Income or starting out. It was never meant to be a livable wage." That's patently false. Can you provide a source that only 20% of workers were covered by either the NIRA or the FLSA?

Quote:Standards were initially set at 25 cents an hour and 44 hours a week, with industry committees given the authority to recommend higher levels. A wage-hour administrator in the Department of Labor could only accept or reject such recommendations, not modify them. But the 40-cents minimum would go into effect in every industry by the end of 7 years, unless it could be demonstrated that it would result in unemployment. The bill set a minimum working age of 16 with a number of exceptions. Exempted were intrastate retail business, most transportation workers, farmworkers, Government employees, and a number of small businesses. Lower standards were allowed for apprentices, learners, and the handicapped.

https://www.bls.gov/opub/mlr/2000/12/art3full.pdf

Quote:A special study conducted by the Bureau of Labor Statistics found that the Act would raise wages for almost 700,000 workers, reduce hours or prompt overtime pay for over one and a half million workers, and prohibit the continued employment of roughly 600,000 children aged 10 to 15.

https://www.epi.org/blog/celebrating-75-...standards/ - I can't find a primary source for this information.
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#36
(08-10-2021, 10:56 AM)Flelm Wrote:
(08-10-2021, 10:41 AM)dfrecore Wrote: When FDR signed the law, it only covered about 20% of jobs.  Only 20% of jobs were considered to be ones where people were expected to make a "living wage."  The other 80% were not.

There were two laws. I posted a quote about the NIRA, which was ruled unconstitutional a few years later. It was replaced by the FLSA. I was pointing to a single statement, that "Minimum wage is meant for supplemental Income or starting out. It was never meant to be a livable wage." That's patently false. Can you provide a source that only 20% of workers were covered by either the NIRA or the FLSA?

Quote:Standards were initially set at 25 cents an hour and 44 hours a week, with industry committees given the authority to recommend higher levels. A wage-hour administrator in the Department of Labor could only accept or reject such recommendations, not modify them. But the 40-cents minimum would go into effect in every industry by the end of 7 years, unless it could be demonstrated that it would result in unemployment. The bill set a minimum working age of 16 with a number of exceptions. Exempted were intrastate retail business, most transportation workers, farmworkers, Government employees, and a number of small businesses. Lower standards were allowed for apprentices, learners, and the handicapped.

https://www.bls.gov/opub/mlr/2000/12/art3full.pdf

Quote:A special study conducted by the Bureau of Labor Statistics found that the Act would raise wages for almost 700,000 workers, reduce hours or prompt overtime pay for over one and a half million workers, and prohibit the continued employment of roughly 600,000 children aged 10 to 15.

https://www.epi.org/blog/celebrating-75-...standards/ - I can't find a primary source for this information.

You actually backed up my claim that the minimum wage did not cover all jobs in your own post!

the 1938 Act was applicable generally to employees engaged in interstate commerce or in the production of goods for interstate commerce.
the 1961 Amendments extended coverage primarily to employees in large retail and service enterprises as well as to local transit, construction, and gasoline service station employees.
the 1966 Amendments extended coverage to State and local government employees of hospitals, nursing homes, and schools, and to laundries, drycleaners, and large hotels, motels, restaurants, and farms. Subsequent amendments extended overage to the remaining Federal, State and local government employees who were not protected in 1966, to certain workers in retail and service trades previously exempted, and to certain domestic workers in private household employment.
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#37
Your claim was 80% of workers were not covered. Where did you get that percentage from?
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#38
(08-09-2021, 09:25 PM)I sanantone Wrote:
(08-09-2021, 06:51 PM)Pats20 Wrote: There will never be an all livable wage society. If the minimum wage was $30 hr then $30 hr wouldn’t be a livable wage. The cost of goods and services would increase and devalue the $30. During that journey many small business would fail leaving little competition for the huge corporations like amazon and Walmart who could afford to hold prices down and pay the wages until they wiped out The little guys. Why do you think bezos and the likes welcome raising wages and challenging their competitors to do the same. It’s because they are better positioned to wait it out till the little companies fail. Minimum wage is meant for supplemental Income or starting out. It was never meant to be a livable wage.


Previous minimum wage increases haven't resulted in significant increases in cost of living. However, wages have been somewhat stagnant for a long time, and the cost of living continues to go up. Either you can compete or you can't. Why would someone work for $7.25 per hour at the corner store when they can earn $15 per hour at Target and get their tuition paid for? Are we to start subsidizing small businesses that can't compete? Honestly, I'm happy for the person who can transition to Target or some other decent-paying company because that means less government assistance has to be paid out.


(08-09-2021, 09:05 PM)freeloader Wrote: I deal with a lot of small businesses and small business owners in my work. The ones who I see suffering the most are the ones who cannot raise their prices.  I have been dealing with some businesses that work with the federal government and are subject to the reimbursements authorized by the government. The reimbursements have not increased but the cost of labor has. I also have worked with a business that got locked into a multi-year contract that has something like a 1.5% annual inflation increase built in. The inflated costs of labor have far surpassed that 1.5%.

It is easy to say “just increase the cost of the goods or services offered to compensate for the increased cost of labor and material”. For most businesses, that will work. But there are a lot of businesses, entire industries, in fact, that are suffering and that cannot simply raise their prices!


Am I understanding you clearly? Workers who want to make more are expected to do what it takes to make more, but this same logic does not apply to small businesses? If people can find higher paying jobs at major corporations, you either have to raise prices and wages to compete or close. That's the way capitalism works. The failed business owner can get a job like everyone else. In my line of work, I've come across a lot of small business owners who have too much overhead.

I absolutely agree with you on workers should go to the highest bidder. I’d didn’t say subsidize small business. I said the reason large corps are eager to raise wages are for their own business agenda. Not that they’re bleeding hearts. They know when the govt force minimum wage increases it puts some of their competitors out of business. Let supply and demand and capitalism move wages.
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