Venture capitalist and businessman Kevin O’Leary expressed frustration over the minimum wage debate on Feb. 26 during a “Squawk Box” interview.
O’Leary, the co-host of ABC’s “Shark Tank,” argued on CNBC that the very debate over wage hikes is already hurting job creation by discouraging small businesses from hiring.
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Closing his eyes and waving a fist, O’Leary said, “I don’t know why people are debating this issue. This is sheer insanity. It’s sheer insanity. There is no metric that makes sense on this.”
“[B]y just keeping this debate alive we are actually compressing job growth,” he continued.
O’Leary explained that the debate was creating uncertainty among small businesses, citing a business in Massachusetts that he had been working with.
That business, according to O’Leary, wanted to hire more employees but “they can’t do that until they know with certainty whether they are paying them $10 or $14 dollars an hour.”
He said that minimum wage hikes increase wages for “your already existing base of employees, so that changes your business model in perpetuity. Then it retards you from the incremental new job.”
Even “Squawk Box” co-host Andrew Ross Sorkin accepted O’Leary’s analysis, saying “I don’t disagree that the uncertainty that this conversation has created is probably stopping businesses from hiring right now. I don’t disagree with that.”
“Squawk Box” co-host Joe Kernen blamed the wage debate on political maneuvering before the midterm elections saying,“Now 2014 is coming up, and the wedge issue that President Obama and the Democrats have decided to drive between the voting population is minimum wage.”
O’Leary agreed: “it gets votes.”