​Fast food CEO: Minimum wage hike will hurt workers

In the battle over raising the minimum wage, CKE Restaurants chief executive Andy Puzder has a message for his workers: You'll be sorry if the federal government boosts your pay.

Puzder, who reportedly made $4.4 million in 2012, told Yahoo! Finance that a higher minimum wage will result in a tougher employment environment for 16-29 year olds. How so? Older, more experienced workers will fill those minimum-wage jobs, pushing younger workers out of their jobs, he said. On top of that, a higher minimum wage will result in a jump in consumer prices, he added.

While Puzder's concerns are among those commonly voiced by those opposing a higher baseline wage, more states are legislating higher minimum wages, given concerns about the difficulties of earning a livable wage on $7.25 an hour. But efforts to boost the minimum wage is getting pushback from the National Restaurant Association, which includes many fast-food restaurants as its members. Meanwhile, fast-food CEOs now take home $1,000 for every $1 earned by their average workers, making the industry the most unequal sector in the U.S.

In Puzder's view, many minimum-wage workers are kids or students looking to get experience in their first job, although research indicates that only about one in 10 low-wage workers are now teenagers. Almost 37 percent of low-wage workers are between 35 to 64 years old.

"I want to make sure people understand the consequences of raising the minimum wage, which is youth unemployment and increased prices and more automation," Puzder said in the interview. Labor participation for people between 16 to 29 "is plummeting because we are pricing them out of the market with these minimum wage increases."

Yet the 13 states that boosted their baseline wages earlier this year have shown stronger growth than the 37 states that didn't touch their minimum wages, a recent study from the Center for Economic and Policy Research found.

The current federal minimum wage has remained unchanged since 2009, while the consumer price index has jumped 10 percent since then.

If the baseline wage is boosted by $10.10 an hour -- which is supported by President Obama -- about 25 million workers would benefit, according to a recent study from Oxfam America. About two-thirds of workers who are paid less than $10 an hour say they either failing to to meet their basic living expenses, or just barely getting by.

Puzder had a suggestion for how to fix the problem: "The government needs to get out of the way," he said. "Businesses will create jobs, and wages will go up."

Of course, that hasn't necessarily proven true for fast-food workers, even with the help of the last minimum wage hike in 2009. The average fast food worker saw their earnings decline last year, while average pay for fast-food workers has only increased about 0.3 percent since 2000, according to a report from Demos.

Fast-food chief executives, meanwhile, have seen their average pay package more than quadruple since 2000, Demos found. Last year, fast-food CEOs took home average compensation of $23.8 million.

  • Aimee Picchi

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