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Some fast-food operators see higher minimum wages as a major positive.
“Our business is great, and our business is better since the minimum wage went up,” Wetzel’s Pretzels CEO Bill Phelps said Thursday on CNBC’s “Squawk Box.”
The CEO of the California-based fast-food chain said that when California raised the minimum wage from $8 to $9, its same-store sales rose 8 percent in the next six months. Two years later, after California raised the wage from $9 to $10, same-store sales were up 7 percent.
“You’ve got low income people who get a 10-11 percent increase, and probably a 30 percent increase in disposable income, so it’s just great for our business,” he said.
Similarly, Buffalo Wild Wings CEO Sally Smith told “Squawk Box” that pricing and productivity do become a factor when the minimum wage is increased, but overall, “I do think that there is an opportunity for that consumer to have more discretionary dollars.”
“You haven’t had an increase in the minimum wage for seven years. It’s crazy,” Phelps said. “I think the minimum wage should be increased more than every seven years, that’s just my opinion.”
Schultz also said that one of the biggest beneficiaries of increased wages could be small-ticket retailers.
“Higher wages could have a positive effect on consumer spending and we look at potentially higher wages or wage growth as one of the potential main catalysts for retail, small ticket spending,” he said.
Schultz also said that overall, the “wage pie” in America has not really grown. And consumers’ relatively fixed amount of income has been increasingly spent on autos and experiences rather than retail products.
“There hasn’t been that much left over for, say, visiting the malls and the apparel sector,” Schulz said.
McDonald’s, meanwhile, didn’t immediately respond to CNBC’s request for comment.
Comment:
Most friends relatives, and the public in general you talk to, are AGAINST a higher base wage. Why? Because that’s what the public was taught over many decades, by the mass media. In my view, the mass media (owned by business and gov’t) has started re-educating the public for higher wages for business and gov’t own benefit.
https://www.cnbc.com/2016/03/31/how-higher-minimum-wages-will-impact-mcdonalds.html