Minimum Wage Confusion...

Interesting interview and I think he's right in one regard. Forcing fast-food employers to pay unskilled new hires $31,200 (FT) a year is outrageous...and counterproductive.

Average starting pay at Starbucks is $9.50. Average customer spend per visit (beverage only) was around $4.30 in 2014. If the average spend went up at the same rate as the proposed MW increase (58%) the average customer would be forced to pay $6.80 for the exact same beverage(s) they purchased the day before...for $2.50 less. The quality of the product didn't go up and neither did the quantity. The quality of the service didn't go up and the wait time didn't go down. The only guaranteed change was Starbucks would have to pay new hires 58% more.

Now extrapolate that dynamic across the entire fast-food industry. An industry that has a disproportionately high lower-income customer demographic. An industry that frequently is the only restaurant option in otherwise 'food deserts'. An industry that frequently offers one of the only 'real' job opportunities for the unskilled in fly-over country and on the ends of the American loaf.

Let's be honest, the 1% couldn't ID a fast food restaurant if their limo driver ran into one. And a cursory look at McDonald's financials over the last 3 years demonstrates how fast middle-income Americans are jumping from the arches. If it weren't for the "47%", none of these FF joints would stay open long...well...maybe Starbucks. So who is going to feel the brunt of the Democrat mantra that the minimum wage should also be a 'living wage'? The poor, the lower income and those living in 'food deserts'. Probably not the folks who voted Republican in the last election.

I'm all for having a debate regarding a 'living wage' based on age, education and other employment related factors. But that's a whole lot different than legislating McDonald's starts the french fry dude at the equivalent of what a sergeant with over 5 years in the Army makes.


Dunkin Donut's CEO & Minimum Wage