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Letter: What a business can afford

Published: Saturday, Feb. 8, 2014 5:30 a.m. CDT

To the Editor:

President Barack Obama, Ill. Sen. Dick Durbin and Ill. Gov. Pat Quinn are proposing an increase in the federal and state minimum wage. Politicians, liberals and economists do not understand profits, which sustain all businesses, yet they want to control business decisions.

To raise the minimum wage will increase the purchasing power of the unskilled laborer, the person with language challenges, the student earning money for college and family members increasing the budget. Some states are even proposing benefits like sick leave and wellness care for family members. What the politicians, liberals and economists fail to understand is that any increase in business costs reduces the profitability of the company. 

Walmart is the punching bag for paying low wages and benefits, yet Walmart has been shown to pay more than minimum wages and is starting to offer benefits. There are thousands of Walmart stores, each adding to the overall profit of the company. Sam’s Club announced that some of its stores will be restructured, resulting in reductions of staff. Safeway, a billion dollar company, closed the entire Dominick’s grocery chain because of low profit margins. Best Buy and Target announced closures of their Dundee-area stores, and Sears is closing its Chicago State Street store. How many stores have closed at the Geneva and Algonquin commons because of lack of profits? The only profit that the federal and state governments understand is to raise taxes.

Companies cannot afford to continue raising prices and remain competitive every time a new federal or state regulation benefits the individual but takes away incentives for the business community.

Workers deserve wage increases, but they have to come from what a business can afford to pay for recruiting, training and retaining its employees – not by a federal or state edict. Any minimum wage increase will only affect a very small minority of workers, but the repercussions in the future will result in much higher wages, further escalating the inequity of the lower-paid and higher-paid workers.

Jack McCabe

Batavia

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