Imagine you own a motel in some major metropolitan area. Perhaps you've owned it for quite some time, or perhaps you bought it a decade ago. Either way, let's assume for the sake of argument that it's a major chunk of your wealth, of the sum total of assets you've accumulated across your working years. You figure you've got another decade in you before you retire, and figure you'll sell your one major asset and live out your golden years off the proceeds.

You work every day, drawing a respectable income during busy times, and perhaps drawing less or nothing during lean times. Your employees get paid before you do, as do your utilities, insurances, taxes, supplies, maintenance and repair bills, and on and on. You get what's left. You might be one of the lucky ones who makes a lot of money doing this, but market forces are relentless, so you're more likely to be earning a decent but not luxe living and banking on the value of your property for your future.

You are among the many small business people who are asset rich but cash poor.

One day, the local government decides that you and your ilk aren't paying your employees enough, no matter that they choose to work for you at market wages. They decide that you need to pay a whole lot more in payroll, and write a law to that effect.

Suddenly, all the math changes. You have to find ways to pay those higher wages. Again, unless you're one of the top performers, you're not going to have much room to cut your own draw, and raising prices will adversely impact occupancy rates. Your business doesn't deliver as much profit as it did before, which means your business isn't worth what it was before.

Which means your retirement plan just went up in smoke.

This scenario came to mind as I read about Los Angeles boosting the minimum wage for workers in hotels with 60 or more rooms from $20.32 to $30. One hotel executive noted "We would love to sell, but nobody will buy them."

I figure the solons on the City Council set a 60 room minimum in order to avoid hurting mom and pop businesses and figuring that the big corporate entities could absorb the wage increase. I figure that's about as deeply as they thought about it. No thought to the wage pressure on those mom and pops competing for workers. No thought on the cap on growth that those mom and pops now face - hopes of expansion and growing their wealth now come with a ceiling. No thought that a 60 room motel isn't even all that big. No thought on the diminished value of those mom and pops, which if mortgaged might even go underwater once the banks do their valuations. Underwater that might even trigger foreclosure sales.

This scenario isn't limited to hotels. Countless other business sector are adversely impacted by government market distortions such as minimum wage increases and other mandates, and that impact does the most harm to those who are already just barely getting by.

It's easy to look at the successful and say "you can afford what we are going to do to you." Their existence makes it easier to ignore everyone else - whom market forces tell us are probably the large majority. For every business owner that makes it big, there are many that merely get by, and many that ride the edge of insolvency.

That's the nature of business, and it's hard enough without government making it even harder.

Distortions such as the one the LA city council enacted have the unfortunate effect of killing off smaller operators, and thereby growing* the market share of the big players. Big Agriculture hoovers up small farms all the time. Properties put into distress by government mandates make for easy pickings and hard squeezes.

An honest application of the Takings Clause of the Constitution would make governments think twice about stealing the legacies of small business and property owners in such a fashion. But, that ship sailed long ago, so we are stuck with do-gooders who don't think through the consequences of their coercions harming while they purport to help.