Even as smaller businesses in the United States seek to weather the onslaught of the pandemic, congressman Ro Khanna (D-CA) says he “doesn’t want low-wage businesses.”
Small- and medium-sized businesses (SMEs) are struggling in the midst of the pandemic economy and at the same time more than nine million jobs have been lost. However, Democratic lawmakers are insisting on a mandatory minimum wage hike that will bankrupt thousands of U.S. businesses.
In an interview for CNN, Khanna said that he and presumably other Democrats do not want small businesses to pay low wages.
“We don’t want low-wage businesses,” he said when asked if family-owned stores should be forced to pay employees more.
In the Democratic representative’s view, if businesses raise the minimum wage -whether they can, or not- that would immediately imply that worker productivity would increase. But Khanna seems oblivious to the fact that those same businesses may close their doors, since a wage increase would force them to raise their prices and put their revenues at risk.
If a small company doesn’t have enough money to pay its employees the set amount, it would be forced to file for bankruptcy, leaving workers not only without wages, but also without jobs.
“Amazon raised their wage to $15 nationally, not regionally. They have more jobs today. It didn’t hurt job creation or business (…) Target followed, they also did it nationally, more jobs,” said Khanna, who referred only to the possibility of large companies raising wages and avoided the situation of smaller businesses.
“I love small businesses. I’m all for them. But I don’t want small businesses underpaying employees (…) I think $15 is very reasonable in this country,” he added.
Considering that in the U.S. most people earning minimum wage do not work in corporations, but in SMEs, it is very likely that a significant increase in the minimum wage would deter small- and medium-sized businesses from hiring new staff at best, or laying people off at worst and eventually closing down.
Recently, the Congressional Budget Office found that an increase in the minimum wage would have mixed effects. In a 2019 report, it said raising the federal minimum to $15 by 2025 would boost wages for 17 million workers and lift 1.3 million out of poverty. But he also said 1.3 million other workers would be put out of work.
“When it comes to the restaurant and foodservice industry, the Biden plan may do more harm than good,” Sean Kennedy, Executive Vice President of Public Affairs for the National Restaurant Association, told the Chicago Tribune.
Khanna’s socialist profile
Not surprisingly, the Democratic representative’s position is to ignore small businesses. Ro Khanna has had the backing of socialist leaders and organizations and has spoken out in favor of initiatives coming from the American left.
Khanna was Assistant Secretary at the U.S. Department of Commerce during Barack Obama’s presidency. He identifies himself as a “Progressive capitalist,” but is backed by the most socialist in the country.
In fact, in February 2019 he was named national co-chair of the Bernie Sanders campaign. He is one of the few representatives who endorsed Sanders for president of the United States in 2016. He frequently advocates for free college education, Medicare for all and the Green New Deal.
An article published by Fox News revealed that Justice Democrats is behind Khanna’s push as a candidate. This is an organization created by former Sanders leaders and they seek “a Democratic majority in Congress” to supposedly create a “thriving economy and a democracy that works for the people and not for big money interests.”
Clearly, this is a socialist organization that demonizes job creation, enterprise and the free market. In fact, the seven Justice Democrats candidates who won their 2018 congressional races were Ayanna Pressley (D-MA), Rashida Tlaib (D-MI), Ilhan Omar (D-MN) and Alexandria Ocasio-Cortez (D-NY).
Ro Khanna and socialist initiatives
The Senate candidate is one of the original sponsors of Senator Sanders’ bill to make college “affordable for all.” Khanna has proposed a $1 trillion expansion of the earned income tax credit (EITC), funded by a financial transactions tax to help working families across America. He now supports a bill to provide “Medicare for all” in the House.
Another socialist initiative very similar to what Chavism implemented in Venezuela was the proposal he built alongside Sanders in 2018. It is the Stop Bezos Act, which would tax businesses for every dollar employees earn in government health care benefits or food stamps.
Khanna’s rationale for the legislation was that it would force corporations to raise workers’ wages or pay for the welfare programs their employees depend on.
In 2018, the Democratic representative signed on to Rep. elect Ocasio-Cortez’s Green New Deal proposal. Initiative that would cost up to 600,000 per household; and also boasts “dangerous” radical goals that go beyond environmental policies.
Despite the shortcomings and shortages of socialist policies to control drug prices in countries with socialist regimes, Khanna would also have supported a kind of price control on the pharmaceutical industry pushed by Sanders, who in November 2018 unveiled a bill aimed at abolishing pharmaceutical monopolies.
It remains to be seen what will happen with Khanna and whether he will eventually be able to make it to the Senate. From Congress, he could seek the opportunity to propose laws that would derive in company closures, the expulsion of entrepreneurs or the demonization of large taxpayers.