Who Does a $15 Minimum Wage Help?

I know. For 17 years, I ran CKE restaurants, the parent company for Carl’s Jr. and Hardees. Our company and franchised restaurants employed over 75,000 people, but, as with most retail businesses, our profit margins were razor thin.

Based on my experience, if we adopt a national minimum wage of $15, here’s what will happen:

1. A lot of people will lose their jobs or have their hours reduced. According to a 2014 Congressional Budget Office study, just a $10 minimum wage would cost half a million jobs as businesses terminate employees.  Obviously, far more jobs would be lost at $15 an hour.  To survive, employers would have to reduce hours even for workers who manage to keep their jobs. That’s a pay cut.

2. Businesses will close, and the jobs they created will disappear.  A recent report from researchers at the Harvard Business School found that each $1 increase in the minimum wage results in a 4-10% increase in the likelihood of restaurants closing.  An over $7 an hour increase, to $15, would be devastating not only for restaurants, but for small businesses and their employees.

3. Young people will lose that entry-level job opportunity.  My first job was scooping ice cream at a Baskin-Robbins in Cleveland, Ohio in the 1960s. I was paid just $1 an hour. But it taught me valuable lessons – like the importance of showing up on time, teamwork, and presenting a happy demeanor to customers. No one can get that better job until they have their first job.

4. The cost of all workers will have to go up.  If you hire a dishwasher at $15 an hour, your cooks will be unhappy with their wages. You’re going to have to pay everybody more, which increases labor costs across the board. That’s more pressure on profits. Too much pressure and you’re out of business.