Andy Puzder, CEO of CKE Restaurants, the company that owns Hardees and Carl’s Jr., sat down for an interview with Yahoo Finance a few days ago to explain why he is opposed to an increase in the minimum wage. According to Forbes, Puzder made almost $4.5 million in salary and bonuses in 2012. That’s almost 300 times what minimum wage employees of his company earn in a year.
Puzder tells reporter Shibani Joshi
Labor participation for people 16 to 29 years old is plummeting, and it’s plummeting because we’re pricing them out of the market with these minimum wage increases, and there are experienced workers who are willing to take the jobs because they’ve had their hours cut to under 30 because of Obamacare.
That’s fail number one. The Fiscal Times reported last February that “[T]here is no compelling evidence to suggest that part-time employment has increased directly because of Obamacare.”
On to fail number two. Puzder tries to back up his first claim with the disingenuous statement that there were 94,000 more people employed in May 2008 than in May 2014. While his raw number may be correct, it doesn’t address what happened during the last half of 2008, when the economy shed jobs at an alarming rate. Private sector employment has been on the increase since 2010. Puzder conveniently leaves out the increase in jobs reported for June 2014, which was the largest increase in over a year.
Joshi derails Puzder’s prattling about teenage employment by observing that studies have found that the average fast food worker is 29 years old, and that many have to rely on public assistance. She asks if youth unemployment should really be the focus of the discussion. Puzder replies that the average wage at his company’s restaurants in $9 an hour, and that average goes up when you take teenage workers out of the mix. He uses that statement to try and refocus the conversation on teens. But Joshi isn’t willing to let him get away with that. She says:
There are a lot of Americans who are just trying to make ends meet. It’s not just people working at your stores, Carl’s Jr. and Arby’s and other stores. It affects a lot of other companies as well, and it affects their quality of life.
You’re right, but minimum wage isn’t going to solve that. What’s going to solve that is a dynamic, growing economy. If people have jobs, wages go up. When there’s a demand for labor, the cost of labor goes up. When there’s no demand for labor, it goes down. And you can’t solve that problem by having the government artificially mandate a wage increase when there is no economic growth to support that.
So, is Puzder arguing that when demand for labor is weak, employers should have the right to pay almost nothing? It sure sounds like it.
Puzder wraps up his comments with the tired old claim that when wages go up, prices also increase, so there is nothing to be gained by workers. Businessweek took a look at what some California companies are doing in response to that state’s minimum wage increase. Yes, prices will rise, they say. But most businesses are planning on price increases of between one and two percent in response to California’s $1 increase in the state’s minimum wage. What effect will that have on prices at Jack In the Box, for example? Menu items at that fast food chain will increase in price on average by less than 10 cents. The U.S. Department of Labor offers a page of myth busting concerning the minimum wage that shoots down everything that Puzder claims.
Pudzer and his corporate cronies need to come up with new talking points, as the old ones are just about worn out.
Here’s the video, from Yahoo! Finance: