Many employers and employees over the past several years have pointed to experience as the reason they oppose a $15 minimum wage, which forms the core of Joe Biden’s proposed $1.9 trillion economic stimulus and COVID-19 relief plan.
Last month, Jamie Richardson, vice president of the White Castle hamburger chain, told CNBC’s “Closing Bell” that raising the federal minimum wage from the current $7.25 an hour would forced the closure of nearly half of his company’s locations and lay off thousands of workers.
“To more than double the federally mandated starting wage wouldn’t be bad for White Castle, it would be absolutely catastrophic,” he said.
More than 200 of White Castle’s 406 locations across the United States would close, with any remaining locations “glowing embers.”
“They would be dying stars,” he said.
Richardson said the move would be unsustainable and result in teenage unemployment. White Castle, he said, is often able to retain teens, and he boasted that 1 in 4 employees had been with the company for 10 years or more.
WND reported in 2017 a study showing that over the past 30 years, minimum-wage increases had reduced employment.
In fact, the popular Coffee Shop restaurant in New York City — which notably once employed minimum-wage champion Rep. Alexandria Ocasio-Cortez — went out of business last year after its co-owner cited New York City’s minimum-wage hike as the primary reason. And it wasn’t the only casualty, as New York City experienced a “restaurant recession” after the mandatory wage increase.
The retail giant Target won praise from liberals in 2017 when it announced plans to gradually raise its minimum wage to $15 an hour. But CNN Business reported in October 2019 that many Target employees who were supposed to benefit from the increase had suffered because of the consequent reduced hours and increased automation.
Also in 2019, employees of Whole Foods, which is owned by Amazon, told The Guardian that they experienced widespread cuts in schedule shifts that often negated wage gains.
“My hours went from 30 to 20 a week,” said one Whole Foods employee in Illinois.
Columnist Star Parker, who operates a business after being on welfare as a single mother, explained the rationale for letting employers decide how much to play their employees.
“Every employer pays as much as he or she can to get the best possible workforce,” she wrote. “If the government sets a floor on what can be paid for a certain kind of job, either the job won’t be filled; someone overqualified will do it; or automation will substitute.”
Automation has replaced some human cashiers in the city of SeaTac, Washington, the first municipality to impose a $15 minimum wage.
“There’s tons of research on the minimum wage. But the bottom line is common sense,” Parker said. “All employers will hire the best workforce they can afford. If government limits what they can afford, the workforce will be constrained.”
‘The real minimum wage’
Andy Pudzer, the former CEO of CKE Restaurants, the parent company of Hardee’s and Carl’s Jr., warned in a FoxNews.com opinion piece on Saturday that Biden’s minimum-wage spike “would exacerbate the devastating impact economic lockdowns are having on small businesses, while doing great harm to 10.7 million Americans who are unemployed.”
“Even with the help available to date, tens of thousands of small businesses have been forced to close permanently and hundreds of thousands more are at risk,” noted Puzder. “Every closure wipes out the jobs those business created and subjects its former employees to the real minimum wage: $0 an hour.
Puzder, who was nomined by President Trump as secretary of Labor but failed to gain enough votes to be confirmed, noted that in 2019, the Congressional Budget Office analyzed a House bill that proposed raising the minimum wage to $15.
The CBO found, he wrote, “that in the year the increase took effect it would reduce family income by nearly $9 billion due to the loss of about 1.3 million jobs, increased consumer prices and reduced economic growth.
Puzder said any minimum wage increase should be at the state or local level, “and the more local the better.”
“The federal minimum wage necessarily ignores differences in the cost of living between states, while a statewide minimum wage ignores differences between metropolitan areas within that state,” argued. “In any event, a federal minimum wage is the worst solution for people seeking work in economically distressed areas.”
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