RUSH: Now, here’s this CNBC stuff. The guest is Kevin O’Leary, who is O’Leary Funds chairman, and he’s cohost, I think, on Shark Tank on ABC. Do you know what that show is? You know what Shark Tank is? I sort of do, but I can’t remember off the top of my head. People go to these entrepreneurs and pitch their ideas, and they have a product that they want to sell, and the sharks basically tell ’em, “You’re stupid. That thing doesn’t have a prayer.” That’s why it’s a Shark Tank. These people either buy it or send you packing. Mark Cuban is one of the sharks. It’s a good show, I’m hearing.
Anyway, one of the cohosts was on CNBC explaining the minimum wage to ’em. They don’t get it and they’re a business network. Andrew Ross Sorkin is a cohost of this particular show at Squawk Box, he said, “You called it and you said it. We had you on maybe three weeks ago. We were talking about the minimum wage, and you said that raising the minimum wage does not mean more jobs, it means less. So, given the CBO report, do you have any quick views on the minimum wage debate?”
O’LEARY: It’s evidence positive, Andrew. That’s the whole point. You know, I keep saying that the litmus test for America is not large corporations. It’s the six-million-plus businesses out there that want to create more jobs every day and fight all kinds of problems. I’ve never been an advocate for any minimum wage. I’ve always felt that at the end of the day, the market would determine a person’s value per hour.
RUSH: Oh, no, we can’t have that, because the market isn’t fair. The market pays people differently. The market pays some people more, and that’s not fair and equitable. That isn’t equality. The market’s a bunch of cheats. But here’s a guy: if you leave it up to the market, people are going to earn what they’re worth. That’s why I always laugh when people start saying, anybody, actor, athlete, anybody. “Nobody’s worth that.” Well, they are to the person paying ’em. You are worth what somebody will pay you, and that is up to you.
Now, if you’re gonna turn over what you make to somebody like Barack Obama, you’re gonna be stuck at seven to 10 bucks an hour max. And then you’re gonna have to hear the Democrats talk about how fair they are, how much they care about you. But people have to lose their jobs in order for others to get that raise. It’s simple mathematics. I don’t know why this is so hard for people to understand. It isn’t, if it’s explained properly. The problem is that most people think that there is no such thing as a small business. They think they’re all big and they think that the people that own those businesses are all rich. And they think that the people that own those businesses, because they’re all rich, all have a stash of money over here they’re not using. They’re saving it for themselves because they’re greedy.
So it takes somebody who cares like Obama to come along and separate those rich guys from their money and give it to the workers, and that’s the only way that the boss is ever gonna be made to be fair, is if somebody like Obama comes in and does it. What people don’t understand is the fragility of most small businesses. They’re fragile. They are not owned by rich people universally and they do not have a stash of money not being used. If they have a stash of money, it’s allocated for something. They’re saving it for expansion or whatever, but there is no stash unused. The owner of the small business pays himself last, not first.
But most people don’t know that, and this is because of what they’re taught. It’s the institutional bias against capitalism that’s part of the Democrat Party. People from a young age are taught that everybody in small business and Big Business is a bunch of crooks and they’re the rich, and they don’t share, and they don’t pay people fairly, and all of that. So when they don’t understand that, or when they believe that and you come along and say, “The minimum wage is gonna lose jobs,” they don’t understand.
“How can giving people a raises from $7 to $10 cause ’em to lose jobs, Rush? It just doesn’t make any sense.”
People that have no idea, that do not have a proper foundational understanding of this, you’ll never convince ’em. But it stands to reason. Company A allocates 50% of its operating budget to labor. (I’m just picking a number.) That’s it. It’s not 55% one day and 44% the next day. It’s 50%. It’s budgeted. They’ve got 50% to pay labor. So here comes Obama raising the cost of labor arbitrarily.
If a guy has 10 people making 50% of his budget, and the budget is arbitrarily raised, he’s not changing income. He’s not gonna raise what he’s paying labor. He can’t and stay in business. So somebody has to get fired with this arbitrary raise thrown in. It’s just the way it works, because businesses do not change their labor costs day to day, hour to hour, month to month. They budget these things as much as they can in advance ’cause it’s the highest cost of doing business, usually.
So if there’s an outside force like the Regime that comes in and says, “You’re paying every one of these people more…” In this example, all these people are making minimum. They aren’t, but let’s just say they are. It’s seven bucks, and everybody working for seven bucks an hour equals 50% of the company’s budget, and here comes Obama saying, “You gotta pay ’em 10 bucks.” Well, the amount of money they’re gonna spend on labor isn’t gonna change.
They’re gonna have to get by with fewer people working if they’re gotta give arbitrary increases, and that’s how people lose their jobs when the minimum wage goes up. Here’s the second sound bite. Kevin O’Leary is then asked by Andrew Ross Sorkin, “What do you think would have happened if we’d had no minimum wage? What kind of wages do you think we’d have today — and more importantly, what kind of economy do you think we’d have?”
O’LEARY: I think we’d have a very vibrant economy based on demand. In other words, people would go seek… Think about if you never had a minimum wage. People would go seek the highest opportunity, the lowest risk all the time. Companies would do the same thing. Let the market determine what labor should be, and we’d have a much more vibrant economy.
RUSH: I’m just gonna tell you right now that your average low-information voter is not gonna understand that at all, sadly. Mr. Shark Tank here is exactly right, though. All he’s saying when he says, “Let the market determine what labor should be,” that means in a competitive market where a business owner has work to be done — and it needs to be done, and he wants it done as well as it can be done — he is going to find the best person he can.
The person who shows the most ambition, shows up on time, is gonna be more valuable. It’s just that simple! It’s competition. It brings out the best in everybody. “Some people don’t want to compete. It’s not fair because some people end up with more than others. It’s not equitable, it’s not equality, blah, blah, blah.” (snaps fingers) So here comes Obama to level the playing field, and always doing it by focusing on the lowest common denominator.
BREAK TRANSCRIPT
RUSH: I’m being told here that Kevin O’Leary is the most hated shark, ’cause he has no emotion. He’s a total numbers guy. He doesn’t care, just like the market. He’s the Simon Cowell, or Cowell…? How does he pronounce it? Cowell? Cowell? Some of you would know. He’s the Simon Cowell of the show. I’ve never seen American Idol, and I’ve not seen Shark Tank. You know, I watch other stuff. True Detective, Game of Thrones. I don’t watch… (interruption) The Bachelor? I don’t watch that. (interruption) I don’t watch The Bachelorette. What are you talk about? I don’t watch that. No way. I may check out Shark Tank.
BREAK TRANSCRIPT
RUSH: All right, look, look, look. I watched — I don’t know which one it was — Bachelor or Bachelorette for one or two episodes. After that, I feared for my IQ, so I didn’t watch anymore. I don’t watch the show. You people have great memories. Yeah, I saw an episode five years ago or whatever it was, but that’s it.