I wrote this morning on the overwhelmingly likely effects of D.C.'s minimum wage hike to $15 on minority youth who need an entry-level job to get started in their work lives. An entry-level job is the beginning of upward mobility.
I was interested that Stephen King, CEO of Dave & Buster's restaurant chain, said something similar, pointing out how this new minimum wage will likely drastically reduce opportunity, in an interview with Fox News:
“As we look at the environment today, we talked about in our call yesterday; we’re facing 4% wage inflation that’s clearly faster than the CPI or something like that. There are pressures on our overall cost structure as a result of it,” King told host Charles Payne.
King said most of the pressure to raise wages comes from states like California and New York where the tip minimum wage has increased substantially causing Dave & Buster’s (PLAY) to face close to double-digit wage inflation. Businesses struggle with how to do more with fewer workers at higher wages, and investing in automation or hiring fewer employees are risks associated with a minimum-wage increase. And that, King said, makes businesses nervous.
“Minimum wage jobs get forced out and as a result, companies look at more technology and different technologies. I think you seen across certainly groceries and airlines where self-service models are becoming much more common across those platforms.”
When it comes to providing opportunities for low-wage earners, King says restaurant businesses continue to be one of the places where a bottom wage earner can work their way up to a multi-unit operator.
“Many of our multi-unit operators, the folks that are out there running 10 restaurants or more, are folks who started as hourly employees,” King said.
The bolding is mine.
Hot Air comments:
The days of starting out in the mail room of a Fortune 500 company and winding up as the CEO are essentially gone, but Mr. King brings up a good point. You may not wind up with his job, but a lot of the managers who operate multiple outlets in his company started out as kitchen and dining room workers and rose up through the ranks to be managers who do quite well for themselves. Every time a sudden spike in labor costs sends more of these workers to the unemployment lines or replaces them with robots, that’s one less chance for someone to follow that type of career path.
What does it mean when a society becomes fixated on raising the minimum wage instead of upward mobility?