Employers are preparing to eliminate jobs and turn to automation.
In this episode, I'm going to address Biden's 15-dollar minimum wage law. And it will create
massive loss of jobs. You'll understand why as you watch and understand this concept.
So, my name's Doug Andrew and I've helped people understand how to optimize their financial assets.
And many business owners and employers, I've trained entrepreneurs, these are the ones who
actually go out and employ these people in America and do such a wonderful job providing goods and
services. And I've noticed throughout my 4 and a half decades helping people to be able to be
profitable, to be able to take things from a lower level of productivity to a higher
level of productivity. That's the definition of entrepreneurship. Many times, we disincentivize
those business owners from taking risks when we feel like we can try to benefit
people in America get their votes and so forth with initiatives such as
raising the minimum wage. Now, having said that, I agree that we want to make sure that
employers are fair. But this is what a lot of politicians do not understand. And unfortunately,
a lot of politicians have never run a candy store before. And so, they often say, "Hey,
we want to try to get voted, get elected. Let's do something that sounds really good to this voting
base. Free college tuition, forgiveness of student loans." Well, guess who's going to vote for you?
Any college student out there probably. 'Oh, that sounds good. I'll vote for that person. Oh,
let's raise the minimum wage to $15 an hour" when some areas of the country $10 an hour actually
buys more than $15 an hour in the San Francisco Bay area. And so, when they announce this it
may sound good but see, politicians often do not understand the domino effect, the repercussions.
So, when president Biden begin to announce that he was going to raise the minimum wage immediately,
do you know what a lot of employers especially between the 2 coasts, the east coast, and the west
coast decided to do? They've already got plans to lay off people, they can't afford it. They
are just going to switch to automation and say, "Enough already. I can't afford it." Now, somehow
many times tax revenues, politicians just think, "Oh, come on. The employers, the higher ups have
enough money." No, no they don't. Most businesses operate on about a 2 or 3 percent profit margin.
And if you raise the minimum wage, they can't afford it. So, let me explain this in simple terms
so that you can understand it because raising the minimum wage sounds good on the surface
but it will cause massive loss of jobs unemployment in this country. Mark my word. Before
sharing this example with you, I've always felt like the minimum wage, if there is going to be one
that it should be regulated state by state. Here's why. I mentioned here that sometimes
in the east coast and the west coast cost of living is high. Washington DC, do you know
the San Francisco bay area where I go often to speak, many of those people shell out double
to quadruple for goods and services down there. And so, a minimum wage in San Francisco because 5
bedroom home is 4.8 million bucks. If you rent a 5 bedroom home, it's 12 grand a month, okay? And so,
yeah, it makes sense. But in the midwest, the cost of living is sometimes half or one-fourth that.
So, to do and across the board raising of the minimum wage is not really equitable. But here's
the example I want to share with you because it looks like it's going to be a federal law
and you're going to understand why I don't think that's very smart. We're going to see unemployment
go up and jobs are going to be going out the window. Let's say that you have a small business
and you're in the midwest. And $10 an hour buys as many gallons of gas haircuts and so forth as
$20 an hour does in San Francisco. So, as an employer, you're operating on a slim little 3%
profit margin. And so, you can afford let's say a $100 each hour to employ people and be productive.
And you would like to have 10 people employed. So, at 10 bucks an hour, they're happy as can be.
I mean, they would love more but they can buy as many gallons of gas and loaves of bread as people
in San Francisco buy for 20 bucks, okay? With $10. So, you can afford how many people at $10
an hour if you have $100 of discretionary money in your company? 10 people. Well if all of a sudden,
bam! Minimum wage goes up to 15 bucks and you must comply. And you're that employer, you go,
"I've got only $100. I can only afford 7 employees at that. And 7 times 15... What is that? 105.
Yeah, that's gobbling up my profit. But I'm going to have to lay off 3 employees." This is simple,
folks. This is economics. So, when you just raise the minimum wage, you're going to see a
job losses in the 20 to 30 percent range. And what does that cost? Well, it causes a recession. What
does that also cause to happen? If the employers tried to hang on to maybe 7 or 8 of the employees,
they have to come up with the money. So, what did they do? They raised the cost of hamburgers
and shakes and french fries. They raised the cost of the goods and services. And so, what good did
it do? You just got a raise but it was all gobbled up because prices to live went up because of that.
Hello? Is this beginning to make sense? Listen. So, if this is making sense to you,
please share with others so they can understand. Because you know, I've heard a lot of people say,
"Oh, that sounds wonderful." Have them watch this. So, share, like, post a comment,
subscribe. I post an in-depth answer to a financial question almost daily on this
3-Dimensional Wealth channel. And if you click the bell, that will notify you when I do that, okay?
So, when we talk about this dilemma, employers all of a sudden are mandated to pay 15 bucks an hour.
Now, many already do that in the coastal cities. So, if you are in the midwest and you have that
ultimatum, well, you either have to lay off maybe 20 or 30 percent of your people or increase the
price that you're charging for goods and services which doesn't help at the end of the day. People
got a raise and they use the raise to pay more for that gasoline they're putting in their car.
What good did it do really, okay? Or else they are forced to go to automation.
I've heard many, many employers unfortunately say, "Well, this is the straw that's breaking
the camel's back with our company. So, we're going to bite the bullet, get rid of people
and just turn to automation and we'll never hire any more people. We're just going to constantly
turn to automation because they keep pricing us out of hiring people. So, what did we accomplish
by raising the minimum wage across the board everywhere in the country? Is this making sense?
So, let me share with you maybe some insights that will help you understand
this concept and many others that are extremely significant that can impact you. So, as you
pay attention to current events and you hear what a lot of tax revenuers are wanting to do to raise
money to fund initiatives such as maybe medicare for all or free college tuition or whatever it
is. It sounds good but it always comes at a cost. A lot of those initiatives are estimated to cost
north of 100 trillion dollars in the next decade. Do the math. That's 10 trillion a year.
Do you know that's twice as much as the IRS collects in taxes in an entire year in America?
Now, they're going to spend three times that much. Where's the money going to come from?
When we latch on to these ideas that maybe sound good on the surface, they're not free. And so,
if you want to empower yourself and make yourself immune from different ways that taxes go
up and how to be able to protect yourself, I would strongly recommend you study strategies such as in
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it's totally tax-free. This knocks the socks off of an IRA ,401(k) plan for your employees. But see
most employers just follow the herd and sponsor a company 401(k) plan until they learn about this.
So, whether you're an employer or an employee you, can empower yourself by reading and studying this
book and making yourself immune from taxes going up and inflation. The cost of living going up
because of such things as raising minimum wage so that you're immune from taxes inflation and that
market volatility that causes so many people to lose money on their hard-earned savings.
Here's how you can claim your free copy. Go to laserfund... LASERfund.com. And you contribute
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book. I'll send it out to you and enjoy. There are all kinds of charts and graphs. But also on this
side there's a whole bunch of stories that will help you understand not only the concept that I've
been talking about on this episode but many, many more that may you may not even be aware to ask
the question. So, let me give you answers and pose the questions that maybe you ought to be asking.