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Dem Rep. Khanna admits Democrats 'don't want' small businesses that pay less than $15 minimum wage

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'We don't want low-wage businesses'

SAUL LOEB/AFP via Getty Images

California Democrat Rep. Ro Khanna essentially argued Sunday that Democrats believe no jobs are better than "underpaying" jobs — those that pay less than $15 per hour.

What happened?

During an appearance on CNN's "Inside Politics," host Abby Phillip asked Khanna whether Democrats should be pushing for an increased federal minimum wage as the pandemic continues to adversely impact the American economy. Phillip noted that millions of Americans remain out of work, particularly in retail and service industries that are more likely to pay employees the minimum wage.

Khanna claimed now is the right time by citing Amazon and Target — two massive companies that have set their minimum wages at $15 per hour — and even alleged that increasing the minimum wage creates jobs.

Phillip responded by again asking about small businesses, not large corporations that can generally afford to pay higher wages.

"I'm wondering, what is your plan for smaller businesses?" she asked. "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?"

Shockingly, Khanna said small businesses should not keep their doors open if they do not pay employees the wage that Democrats are demanding.

"Well, they shouldn't be doing it by paying people low wages," Khanna replied. "We don't want low-wage businesses. I think most successful small businesses can pay a fair wage."

"I love small businesses. I'm all for it. But I don't want small businesses that are underpaying employees," Khanna went on to say. "It's fair for people to make what they're producing and I think $15 is very reasonable in this country."

Rep. Ro Khanna on CNN Inside Politics with Abby Phillip www.youtube.com

Later, when asked if progressive Democrats should compromise on raising the minimum wage to pass the next stimulus, Khanna said moderates should be the ones who compromise.

How many jobs are at stake?

Despite Khanna's claims, the Congressional Budget Office found in 2019 that raising the minimum wage would potentially cost millions of jobs.

In an average week in 2025, the $15 option would boost the wages of 17 million workers who would otherwise earn less than $15 per hour. Another 10 million workers otherwise earning slightly more than $15 per hour might see their wages rise as well. But 1.3 million other workers would become jobless, according to CBO's median estimate. There is a two-thirds chance that the change in employment would be between about zero and a decrease of 3.7 million workers. The number of people with annual income below the poverty threshold in 2025 would fall by 1.3 million.

House Democrats released their $1.9 trillion stimulus bill on Friday. The legislation includes a federal minimum wage hike.

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