Businesses of all sizes will go through a "period of pain" to get the economy back up and running and will need to reevaluate how they support their employees as people go back to work after the pandemic, billionaire entrepreneur and Dallas Mavericks owner Mark Cuban said.
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"We’re going to go through a reset. It’s really difficult to know what America 2.0 is going to look like, particularly at the beginning, and so all businesses of all sizes are going to be reevaluating," Cuban told Charles Payne during FOX Business' America Works Together virtual town hall Thursday. "I really prefer small government and small intrusions but now it’s going to be a little bit different. I think we’re going to have to extend unemployment benefits, we may have to see a federal minimum wage [hike]."
The current minimum wages are not "really applicable anymore," he said.
The federal minimum wage for covered nonexempt employees is $7.25 per hour, according to the U.S. Department of Labor. Georgia has the lowest minimoum wage at $5.15 an hour and California has the highest state minimum wage at $12 an hour.
Instead, he believes people need a "living wage" and that the federal minimum wage should be raised to $15 per hour.
"Now a lot of small businesses historically have been against that, including me, but the route of that problem was if you’re in one city and the city next door to you doesn’t have the same minimum wage, you’re at a disadvantage," Cuban said. "But if it’s a federal minimum wage, not only are people able to pay their bills but every company plays by the same rules."
While Cuban acknowledges that it will create a small financial burden, he says that if all small businesses are being held to the same standard and moving towards the same goals, then it won't be any different than their normal expenses. He also believes it will drive our economic recovery from the coronavirus a lot faster than more handouts from the federal government will.
"If all my small businesses are paying more in wages, or the minimum wage, that’s going to create a little bit of a burden but as long as I’m competing with everyone else doing the same thing, it’s really no different than rents going up in an area or the cost of any commodity," Cuban said. "As long as we all play by the same rules and we lift up people from the bottom, to me, that’s what’s going to drive the economy more than government pushing down from the top."
White House chief economic adviser and National Economic Council director Larry Kudlow has previously been a strong opponent of a federal minimum wage, calling it a "terrible idea" that would damage small businesses by forcing them to take on higher payroll costs.
While Cuban acknowledges that he expects a lot of criticism towards the idea of a federal minimum wage hike, he argues that it wouldn't vary from state to state, so "no business in one state has an advantage over a business in another" and every American would be on an equal playing field.
"Everybody in your community is making $15 an hour as well, even if they’re working for a bigger company," Cuban noted. "So there’s more money within the system to buy from you."
He believes the country needs to take a "push up" economics approach rather than "trickle down" economics approach.
"In order for us to get out of this malaise, in order for this economy to turn around, it’s gotta be trickle up. We’ve got to have people with money that we’re willing to spend and able to spend," Cuban said. "Until that happens, this economy is not going to hit that rocket ship."
The billionaire's comments come as another 4.4 million Americans have filed for unemployment in the last week as a result of the coronavirus, according to the latest report on Thursday by the Department of Labor.
In the United States, there are more than 856,000 confirmed coronavirus cases and more than 47,000 deaths, according to the latest update by Johns Hopkins University.