Who Does a $15 Minimum Wage Help? | 5 Minute Video
Would a nationwide $15 minimum wage help or hurt American workers? Andy Puzder, former CEO of the parent company of Hardee’s and Carl’s Jr., explains.
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Script:
Progressive politicians love to talk about raising the minimum wage.
It makes them sound caring, compassionate, concerned. They’re on the side of the worker, standing against the greedy employer.
The current call is for a national $15-an-hour minimum wage – more than double the current federal rate of $7.25.
A number of cities and states are already there – including New York, California, Washington D.C. and Seattle. Others are considering it.
The left casts the minimum wage debate as a war between employee and employer. But most business owners pay their workers as much as they can. Finding and keeping good people is the hardest part of any employer’s job.
I know. For 17 years, I ran CKE restaurants, the parent company for Carl’s Jr. and Hardees. Our company and franchised restaurants employed over 75,000 people, but, as with most retail businesses, our profit margins were razor thin.
Based on my experience, if we adopt a national minimum wage of $15, here’s what will happen:
1. A lot of people will lose their jobs or have their hours reduced. According to a 2014 Congressional Budget Office study, just a $10 minimum wage would cost half a million jobs as businesses terminate employees. Obviously, far more jobs would be lost at $15 an hour. To survive, employers would have to reduce hours even for workers who manage to keep their jobs. That’s a pay cut.
2. Businesses will close, and the jobs they created will disappear. A recent report from researchers at the Harvard Business School found that each $1 increase in the minimum wage results in a 4-10% increase in the likelihood of restaurants closing. An over $7 an hour increase, to $15, would be devastating not only for restaurants, but for small businesses and their employees.
3. Young people will lose that entry-level job opportunity. My first job was scooping ice cream at a Baskin-Robbins in Cleveland, Ohio in the 1960s. I was paid just $1 an hour. But it taught me valuable lessons – like the importance of showing up on time, teamwork, and presenting a happy demeanor to customers. No one can get that better job until they have their first job.
4. The cost of all workers will have to go up. If you hire a dishwasher at $15 an hour, your cooks will be unhappy with their wages. You’re going to have to pay everybody more, which increases labor costs across the board. That’s more pressure on profits. Too much pressure and you’re out of business.
5. Fewer people will open businesses. $15 an hour is a very steep hill to climb. Would-be entrepreneurs will do the math on labor costs and realize it’s just not worth the risk. This is a real cost to the economy that we can’t measure. A company that never exists never employs anyone.
6. Prices for everything will go up as businesses pass higher labor costs along to consumers. One of two things will happen: Either consumers won’t pay the higher prices and businesses will lay off workers or close, or consumers will pay higher prices and have less money to spend elsewhere. Either way, the higher minimum wage will represent a drag on the overall economy.
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Increasing wage does risk job elimination and price increase. Therefore, we should all drop wages to as close to zero as possible so we can all be employed… like slaves – this is an obviously stupid comment, right? We have to find balance. Increasing wages can sometimes function like an increase in export/import taxes. Corporations are trying to take their factories overseas, so how do we keep some of that lost economic impact in the states? We can partially do it by increasing the cost of doing business in the states. Full mechanization is not here, we're not even close, so businesses must continue to use manpower, and we can charge them more for using it by increasing wages. This forces a higher PERCENTAGE of their profits to get wrapped into the cost of business: our employment wages.
Invest in start ups that innovate new ways to fuel the eco socialist future off the marrow of the ruling class.
Are you prepared to work for $7.25/hr yourself?
A restaurant should have a 30% net. Anything lower is not sustainable
very funny right-wing fantasies
Man remember you used to be able to live off of the minimum wage? Explain how that worked considering you say raising the minimum wage is bad. All these arguments are saying what about the poor millionares. Am I crazy for thinking we should put individual americans before big companies? I want a. Argument that isn't easily refutable.
People can't live on money that restaurants are paying, how can they afford to get to work only make minimum wage..not the worker faults,that the government keep spending money like crazy cause this high inflation…so who pays the price the worker..under paid can't live..lay off can't live
I'll assume Mr. Puzder got his first job in his mid-teens, or around 1965. The minimum wage then was $1.25. Adjusted for inflation with today's inflated dollars, that would be the equivalent of $12.39 today (our current $7.25 has 58.5% of the purchasing power). Also if the current federal minimum wage was adjusted for inflation, that $7.25 set back in 2009 should be $10.55 today.
2:48. This comment about capitalism fading in Europe is inconsistent with some of the videos on Denmark and Capitalism vs. Socialism. Much of Europe is capitalistic even though they have expensive social systems which requires high taxes.
Adjusting for inflation, being paid $1 per hour in the mid 1960's is equivalent to being paid $10 per hour today.
When elevator attendants strike twice to get increased wages, we got automatic elevators.
When minimum wages increase for entry level jobs, we will get robots.
I guess we all know what the next best career is: robot and AI industry 😂😂😂
Running a fast-food restaurant is a great encouragement to pay workers less than they deserve.
Let's look at the facts, that you have not.
Doubling the minimum wage from $7.25/hour to $14.50 is not wrong because the minimum wage hasn't been raise in over 16 years.
The longest period ever in America.
The minimum wage had its greatest buying power in 1968 under President Johnson.
If that minimum wage had just kept up with inflation, the minimum wage would be $14.50/hour today. Imagine that.
And you pay your workers $7.25/hour. What an incentive. How much was your salary when running Carl's Jr. and Hardees?
$300,000 or $400,000 per year? Or more.
Some people are getting killed by being underpaid and guess who is making a killing?
By your reasoning, the minimum would stay at $7.25/hour forever or may go to $0.00/hour.
That dollar/hour you got paid in your first job has a buying power of $10.53 today. I understand now why you want to pay people much less.
There is no trickle-up effect with the minimum wage.
The minimum wage is going up too fast? It hasn't gone up in 16 years!
Having a job isn't better if you're a slave.
Minimum wage is anti-capitalism not pro-employee.
"To survive, employers would have to reduce hours, even for workers who manage to keep their jobs… thats a pay cut." yes their hours are being cut some but they are probably being payed the same or more because of the minimum wage increase. Good deal for the worker: kess hours, same (or even higher) pay.
"An over $7 an hour increase to $15 would be devastating not only for restaurants, but for small businesses and their employees. Yes it would be bad for the employees if the businesses close, but if they manage to stay open, the employees will be well off. Also employees are way more likely to work if they know they are being paid more.
"A low minimum wage makes it easier to find a job and a job teaches you valuable lessons." Everyone is going to get a first job and learn the valuable lessons regardless of how hard it is to find: if you don't, you starve. Also, as @theCodyReeder said: The 1$ an hour you made in the 60's had the buying power of 8$ an hour today, which is actually 75 cents above the minimum wage. This example is extremely misleading.
"Or consumers will pay higher prices, and have less money to spend elsewhere." If the we have low minimum wage then we won't have the extra money to spend in the first place.
"the minimum wage is going up to fast… we can't catch our breath." -some wealthy business owner that is mad about owning 3 instead of 5 businesses.
"Most business owners pay their employees as much as they can" Literally every corporation
Its funny how this is a recurring theme since the beginning of money and its usually a bunch of old farts trying to have people work for cheap while they stuff their pockets. Companies that dont want to change with the times should go under, leaving space for others to take its place.
Years later inflation has reached the point that $25/hr with a single job can barely afford a good number of major cities. My dad could've paid for his entire education and took care of himself on the 7/hr in the 70's, but it's 2024
If you really care about small businesses then you would want 15 minute cities but you don’t actually care about small businesses
I’ll tell you who a $15 minimum wage helps. Workers
Having a higher minimum wage in states the have a higher cost of living can make sense (although cost of living can vary even within a state) mandating that an entry-level employee in a low cost-of-living area should make as much as one in LA or New York is just plain stupid. but then…politicians. There is a difference between politicians and statesmen: statesmen know how to run a government, politicians know how to get elected.