In a 2015 interview on Valuetainment, billionaire entrepreneur and former owner of the Dallas Mavericks Mark Cuban shared some interesting views regarding income inequality and the minimum wage. He reflected his beliefs that raising the minimum wage is an important economic and societal issue.
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Cuban’s perspective comes from personal experience within his own company when he found out that some of his employees were on government assistance despite having jobs—a realization that didn’t sit well with him.
“I hate the idea that I’m subsidizing somebody. You know, the fact that I’m not paying enough, everybody’s taxes are subsidizing this person’s life,” Cuban said. This motivated him to raise the minimum wage for his employees to at least $10 an hour in December of that year.
Mark Cuban’s main point is about fairness. He explained that if all businesses have to pay more, it keeps the competition level. Nevertheless, he admitted that raising wages might change things in the market. Still, the bigger problem is that businesses paying low wages rely on government help to make up the difference.
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“All of us pay for the fact that you’re not paying that person enough,” Cuban stated, addressing business owners who resist raising wages. He argued that businesses essentially offload the cost of low wages onto taxpayers, which isn’t fair to the general public.
Cuban’s solution isn’t just about increasing wages but also about creating a more sustainable financial system for lower-income people. He criticized the current system where saving money offers little to no interest. “If you put that money into the bank ... 6,000 a year ... you’ll have 6,060 dollars. ... The point being is you’re never going to improve your place in life,” he noted.
He proposed that the government offer savings bonds or certificates that pay a higher interest rate to help people build their asset base without the risk of losing everything to unforeseen expenses. He believes this would help reduce income inequality by giving people a more reliable way to save and grow their wealth.
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Minimum Wage Hike Impact
When California's minimum wage increased from $16 to $20 on April 1, fast-food giants like Chipotle, McDonald's, and Starbucks raised prices to cover the higher costs. This wage hike aimed to help workers but resulted in increased operational expenses for businesses, which passed these costs on to consumers.
With labor costs going up, many companies started looking into using robots and AI to make their operations more efficient. For instance, Chipotle tried out a robot to help make guacamole faster. As wages kept rising in different states, more companies invested in automation to keep their expenses under control.
Although Cuban means well, reality is sometimes not as simple. The impact on the fast-food industry shows that while raising wages benefits workers, it also leads to higher costs for businesses and consumers, pushing companies to find new ways to cut costs, such as investing in automation.
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This article 'All Of Us Pay For The Fact That You're Not Paying That Person Enough,' Says Mark Cuban About Entrepreneurs Who Won't Raise The Minimum Wage originally appeared on Benzinga.com
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