The following is an excerpt from a recent New Guard interview on ...
Authored By Karl Stahlfeld
March 08, 2021
The following is an excerpt from a recent New Guard interview on the minimum wage debate with Andy Puzder. Puzder is a YAF speaker and the former CEO of CKE Restaurants Inc., the parent company of Hardee’s and Carl’s Jr.
Growing up, did you ever expect to become an attorney or CEO?
No. When I was ten years old and arguing with my mom, she did say that I’d make a good attorney. My question was, “What’s an attorney?” My dad was a WWII veteran, car salesman in Cleveland, Ohio. My mom was a stay at home mom. I started out working at Baskin-Robbins for minimum wage, which back then was a dollar an hour.
Recently, there’s been a lot of talk about a $15 federal minimum wage. What are your thoughts on a $15 minimum wage or other similar proposals?
Well, younger people should be very concerned about a $15 minimum wage. There was a study was published by the Bureau of Economic Analysis recently that said that a disproportionate amount of the job damage would hit less educated and experienced workers.
The Congressional Budget Office just came out with a study a couple of weeks ago of the very bill that’s before Congress now, and they said that they estimated that the bill would kill 1.4 million jobs, primarily among younger, less educated workers. So this would have a very negative effect on young people’s job opportunities and wages going forward.
If it would have such a negative impact, why are we seeing so many people push a $15 minimum wage?
Well, there are a couple of reasons. First, the progressive left are big supporters of labor unions, and a lot of labor union contracts are determined by the minimum wage. In other words, if the minimum wage goes up, then the wage level is set in the contracts go up.
Second, it sounds good. People hear that we’re going to lift wages for lower income workers and nobody says that we’d be cutting millions of people out of jobs. People that managed to retain their jobs will get a wage increase but not everyone manages to maintain their job. The real minimum wage, as Dr. Thomas Sowell says, is zero dollars. That’s the wage you get if you don’t have any job at all. And that’s the result for millions of workers of increasing the minimum wage beyond what businesses can afford to pay for entry-level jobs.
Do you think that big businesses are better situated to deal with a higher minimum wage than smaller businesses?
We can already see that to be true. Amazon is extremely profitable and already paying a minimum wage of $15 an hour without a government mandate to do so. Costco just went to $16 an hour. These larger businesses can better afford to pay workers more, particularly as they increase worker productivity with the help of automation. Smaller businesses can’t automate as easily and can’t reduce costs the same way a larger company can. A study recently came out saying up to 44% of small businesses were closing because of the pandemic. Now, why on earth would you increase the minimum wage for small businesses when they’re just barely holding on by the skin of their teeth?
What policies would you suggest to increase wages and help people improve their lives?
If you want to create opportunity, if you want to lift people out of poverty, if you want to increase family wages, the best way to do that is through job creation. In 2019, after a couple years of pro-growth policies, we saw the unemployment rate hit 50 years lows. Businesses had to compete for workers and wages rose 3% in one year. Median family income rose 6.5%. We saw the largest decline in poverty rate since they started tracking it.
We are the wealthiest nation in the history of the world because we encourage businesses to be productive and create jobs and compete for workers which causes wages to rise organically. The more we can do to feed the entrepreneurial spirit, the more successful we’ll be as a nation.