Democrat Rep. Ro Khanna: ‘We Don’t Want Low-Wage’ Small Businesses That Pay Less Than $15 Minimum Wage
Rep. Ro Khanna (D-CA) told CNN in an interview on Sunday that he and presumably other Democrats “don’t want low-wage” small businesses as he advocated for increasing the minimum wage. “We don’t want low-wage businesses,” he said when asked if mom and pop shops should be forced to pay employees more. “I think most successful small businesses can pay a fair wage.”
“Well, of course, large businesses like Amazon and McDonald’s, for example, can and perhaps should pay more, but I’m wondering what is your plan for smaller businesses?” CNN’s Abby Phillip said. “How does this in your view affect mom and pop businesses who are just struggling to keep their doors open, keep workers on the payroll right now?”
“Well, they shouldn’t be doing it by paying people low wages,” Khanna said. “We don’t want low-wage businesses. I think most successful small businesses can pay a fair wage.”
“If you look at the minimum wage it increased with worker productivity until 1968 and that relationship was severed. If workers were actually getting paid for the value they were creating it would be up to $23,” he claimed. “I love small businesses. I’m all for it. But I don’t want small businesses that are underpaying employees. It’s fair for people to be making what they’re producing and I think $15 is very reasonable in this country.”
TRANSCRIPT PROVIDED BY CNN:
PHILLIP: And joining me now on all of this is Democratic Congressman Ro Khanna of California. Congressman Khanna thank you for being with us this morning.
REP. RO KHANNA (D-CA): Abby, great to be on.
PHILLIP: So, you know, Congressman I know that you feel very strongly like many progressives about the minimum wage issue. Right now at the same time businesses both large and small are struggling in this pandemic economy, more than nine million jobs have been lost in the last year and they still aren’t back.
And the problem is particularly acute in industries like retail and food service, which are more likely to pay minimum wage. I think the question that a lot of Republicans are posing and perhaps some moderate Democrats is timing. Is now the right time to increase it to $15?
And I should say the bill has stages, of course, but immediately it would go up about 30 percent right now. Is now the right time to do that?
KHANNA: Abby, it’s absolutely the right time to give working Americans a raise.
Let’s look at the facts, 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. I would encourage people to read Arin Dube’s (ph) work. He’s done a survey of minimum wage raises not just here but in Britain. He concludes that if you raise the wage to 80 percent of the median wage which in our case would be $15 there is a negligible effect on employment.
Actually you can create jobs by paying people more so they are spending it more. So we need to be guided by the economics of the facts here.
PHILLIP: Well, of course, large businesses like Amazon and McDonald’s, for example, can and perhaps should pay more, but I’m wondering what is your plan for smaller businesses? How does this in your view affect mom and pop businesses who are just struggling to keep their doors open, keep workers on the payroll right now?
KHANNA: Well, they shouldn’t be doing it by paying people low wages. We don’t want low-wage businesses. I think most successful small businesses can pay a fair wage.
If you look at the minimum wage it increased with worker productivity until 1968 and that relationship was severed. If workers were actually getting paid for the value they were creating it would be up to $23.
I love small businesses. I’m all for it. But I don’t want small businesses that are underpaying employees. It’s fair for people to be making what they’re producing and I think $15 is very reasonable in this country.
PHILLIP: You’re also pushing on another issue for the Biden administration to forgive up to $50,000 in student loans. It’s important to note that the Biden plan forgives about $10,000 in student loans. That would clear debt for about 15 million borrowers and more than half of those who default actually owe less than $10,000.
These are people who maybe they went to one semester of college, didn’t finish their degree and are struggling to pay it back. Meanwhile, the highest earners owe more than a third of all student debt.
What do you — what do you say to those who point out that $50,000, as ambitious as it is and as helpful as it would be for some people, wouldn’t help maybe the most people and may help even the people who don’t actually need it the most?
KHANNA: Well, first of all, I’d say let’s at least do the $10,000 right away. So I encourage President Biden to at least sign the executive order to have that done. Second, the debt relief of $50,000 is targeted. It wouldn’t go to people like me or to President Biden’s daughter. It goes to working and middle-class Americans.
KHANNA: And I think that having a young person of many black and brown communities that are disproportionately affected or rural communities, graduate with $30,000 — $40,000 of debt, sometimes not even get a college degree, is cruel. It prevents them from starting a family. It prevents them from getting a house.
We can afford this. I just closed a bill that would raise $1.2 trillion over the next ten years just by enforcing the tax on the wealthiest Americans, not asking to raise their taxes, just enforcing that they actually pay the tax. Let’s use that money so we’re not burning the next generation.
PHILLIP: In general, you know, progressives, I think, are facing a critical moment right now. Last fall when we were in the midst of another negotiation of a COVID relief you called it a moral obligation to act so that people could get immediate relief right now during this crisis.
Do you think that you and your colleagues are facing a similar moment? Should progressives be prepared to come on board even if they don’t get some of these big agenda items that you all are pushing for as important as you might think, for example, the $15 student loan bill might be? Are you willing to compromise on that in order to get money in people’s pockets now?
KHANNA: Yes, Abby. I will vote for the final package but my question is why isn’t this question asked of the moderates? Why don’t they have to compromise sometimes? I mean I have voted for every single Cares package to date in the Congress.
And there are many times there were provisions I didn’t like. I didn’t like the fact that it gave billions of dollars to Mnuchin or more money to the Fed to give to financial institutions, but I still voted for it because of the urgency of getting money to people.
Now, my question is why not have the same question for the moderates? Maybe they disagree with the minimum wage but the overwhelming Americans agree with it. So they can vote for the final package even if they disagree with some of those provisions.
PHILLIP: I suspect we will be asking those questions of the moderates, too.
You know, on a different topic we were just talking about Texas a few minutes ago. You are the chairman of the House Oversight and Reform Subcommittee on the Environment. And you have said that you’re planning to hold some hearings about what happened down in that state with the electrical grid failures.
What are your initial concerns about how this was handled? And who are you planning to call to Washington to testify?
KHANNA: We will be holding hearings. We need to hear from the ERCOT CEO. As Paul Begala said, this was an anticipatable problem. Ten years ago they had the same issue.
Why did they not weatherize their equipment? Why did they not take appropriate regulatory action? Texas has had an attitude of we don’t need to invest in the weatherization, we’re just going to allow deregulation. Why were those decisions made?
And then most problematic, why are people on television telling lies to the American people about blaming renewable energies? Where did these conspiracy theories come from? We will get to the bottom of this.
PHILLIP: And lastly quickly before you go there has been a spate of attacks, some of them in your state of California on Asian-Americans in the last year, thousands of them recorded by some advocacy groups. What do you think needs to be done about that?
KHANNA: I appreciate your raising that, Abby. It doesn’t get enough attention. There has been increasing xenophobia and hate against Asian-Americans, some of it was the tone of the last administration.
But one thing we have to be careful about, and I’m all for tough, fair policies with China, but we cannot be inflaming those tensions in ways that are going to create a new Cold War and form (ph) anti-Asian sentiment in the United States. So we all need to be responsible in our rhetoric.
PHILLIP: And these attacks are so tragic and horrifying and hopefully all of them will be fully investigated.
Congressman Ro Khanna, thank you so much for joining us on INSIDE POLITICS this morning.