CEOs Admit Minimum Wage Raises Actually GOOD For Business!

You know, like we've all been saying forever.

Last year, the National Restaurant Association spent $2.6 million on lobbying, much of which was directed against the Raise the Wage Act.

For years, the primary narrative coming from business owners has been that if we raise the minimum wage, employers won't be able to afford to pay workers, and either people will lose their jobs to robots, or hamburgers will cost eleventy million dollars and only the wealthiest people will be able to afford Happy Meals.

In fact, that is the exact narrative pushed by the National Restaurant Association in a letter to Nancy Pelosi earlier this year.

We [...] surveyed on the specific steps restaurants would seek to stay open if the Raise the Wage Act was implemented this year. The response was clear – passage of this bill this year would lead to job losses and higher use of labor-reducing equipment and technology. Nearly all restaurant operators (98%) say they will increase menu prices. But what is clear is that raising prices for consumers will not be enough for restaurants to absorb higher labor costs. Eighty-four percent of owners responded they will likely have no choice but to cut jobs and employee hours from normal levels, while seventy-five percent say they will have no choice but to cut employee benefits from normal levels. Finally, sixty-five percent of operators say they will likely add labor-reducing equipment or technology.

But that whole narrative is about to get a little awkward!

In some recent earnings calls, when asked about what a minimum wage increase might mean for their business, CEOs and top executives of several major chains shared that they are actually doing just fine in states with higher minimum wages — and in many cases, they are doing even better. You know, because people have actual money to spend.

"As they've increased their minimum wage kind of in a tempered pace over that time frame, if you look at that time frame from us, California has outperformed the system," [Denny's CFO Robert] Verostek said on an earnings call. "Over that time frame, they had six consecutive years of positive guest traffic—not just positive sales, but positive guest traffic—as the minimum wage was going up." [...]

"Our view is the minimum wage is most likely going to be increasing whether that's federally or at the state level as I referenced, and so long as it's done... in a staged way and in a way that is equitable for everybody, McDonald's will do just fine through that," [McDonald's CEO Chris] Kempczinski said. [...]

Domino's Pizza CEO Ritch Allison told investors in a February earnings call, "We've been able to manage our way through a lot of minimum wage increases across the country. And I'll tell you, quite honestly, in our corporate store business, we're not paying the federal minimum wage anyway. You can't go out there and hire people at that rate anyway. We're above the minimum wage, both for our folks that work inside the stores and our tip drivers on the road. And then in our supply chain business, we're in excess of $15 an hour everywhere we operate." [...]

"Many including me are supportive over time that the minimum wage needs to move up," said Hilton CEO Chris Nassetta in a February earnings call. "I think we should all assume that the minimum wage is going to be going up over time. In fact, because it needs to."

"To the extent that there is minimum wage increases in certain of our demographics where we operate, that has got a halo effect on the revenue side," said Six Flags chief financial officer Sandeep Reddy during a February earnings call, in response to a question about whether a higher wage helps boost spending at its parks.

Six Flags' CEO Michael Spanos added: 'We're roughly half teens and young adults and roughly half families and children and to Sandeep's point, we think it absolutely helps in that regard [to] put more money in their pockets."

It's almost as if people having money is good for businesses that rely on people spending money. Boggles the mind, doesn't it?

Since the Reagan era, it's been drilled into our heads that the only way for "job creators" to be able to "create jobs" for people is if they can pay those people less than they need to live on, and the only way they will make the grand sacrifice of "job creation" is if they can get absurdly wealthy from doing so. And workers were all supposed to hunker down and sacrifice and scrape by and not unionize and not ever ask for more and not ever take vacation days because eventually it would all be worth it, somehow.

It's becoming increasingly clear that this is absolute bullshit, and even these rich dudes can see the writing on the wall. The days of not paying workers a living wage and expecting that to be okay are over. It's bad for them, it's bad for anyone else who might want to start a business, and it's bad for the rest of the world when Americans are paid so little they can only afford chocolate mined by child slaves and clothes made in overseas sweatshops.

If you can't afford to pay your workers a living wage, then you cannot afford to have a business where you have employees. Just like you couldn't have a business if you couldn't afford rent or inventory. These CEOs and executives understand that. They know they could "survive" just fine paying people a living wage, they just haven't (most of them) done so, because they don't have to.

Well, soon they will have to. We hope.

[ Newsweek ]

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