The Price We Pay For a $15 Minimum Wage.

With the $15 minimum-wage law being put into effect in cities from coast to coast, fast food restaurant chain Wendy’s, whose subsidiaries include another fast food restaurant chain called Arby’s, announced yesterday that its franchises will have the choice to use self-serving kiosks instead of paying employees the new minimum wage rate. Economic experts and those in the fast food chain business predicted that this would happen and no one paid attention to them. When politicians and their media puppets were pushing for an increase of the minimum wage to $15 an hour the ignorant masses latched on to their inept leaders while dismissing economist experts’ warnings that raising minimum wage would hurt the economy. Why didn’t the masses heed the warning of the economists; because the economists weren’t telling the people what the people wanted to hear. The masses would rather believe what they want to believe instead of what they need to believe, just like they do at election time. Instead of learning from past mistakes of passing something before realizing its effect, the American public is learning its lesson the hard way once again, and once again it’s hitting them in their wallet.

If the American people did not want to listen to economists they should have at listened to the top people at the fast food chain restaurants. On the subject of raising the minimum wage, Carls Jr./Hardees CEO Andy Puzder, predicted in March that by “ driving up the cost of labor, [the government is] driving down the number of jobs. You’re going to see automation not just in airports and grocery stores, but in restaurants.” White Castle Vice President Jamie Richardson said just last month that the increase in minimum wage “could create a whole generation of kids who won’t get their first job. We’re in tough neighborhoods and White Castle hasn’t abandoned those neighborhoods. On the surface, higher pay seems noble, but it’s not because it denies the reality of the free-enterprise framework that has allowed small businesses like ours to thrive.” Richardson’s sentiments were reiterated by Ed Rensi, former president and CEO of McDonald’s USA who stated that a $15 minimum wage will wipe out  “thousands of entry-level opportunities for people without many other options.”

Every business needs to maintain its profits to stay viable and to please the stockowners. Cutting into their profit buffer brings changes.They need to maintain that buffer. Anything that cuts into that buffer results in cuts or cheaper materials and/or products.  In terms of the food industry, businesses face the dilemma of either raising prices on their menus to make up for the difference in salary pay, cut the worker, or turn to technology to replace the worker. Investor’s Business Daily already reported that Wendy’s locations have already raised prices in an effort to offset the minimum wage increase in pay. As I stated on SEVNETWORK’s Sunday night show Politrixx, raising minimum wages only guarantees a cut in employment opportunities. While on the subject on investing, Wendy’s stock fell significantly this week as the restaurant chain is struggling to remain alive in a slow economy. The minimum wage increase is an extra burden this franchise did not presently need in its condition nor does its sister fast food chain Arby’s need this stress on its liabilities column in accounting books.

Understand this: Minimum wage IS NOT the ideal pay to make a living off of let alone support a family. You should not leave school and think: “Yay! I’m off to a minimum wage!”. It’s the starting point, a springboard to give you real world experience and to motivate you to move up in a company and get the better pay scale or leave it with your experience and ambition for better pay elsewhere. These minimum wage jobs also serve as the second job to get when you need to make the extra buck for the holidays or to pay the smaller bills, for example. Minimum wages are salaries and those are taken into account of every month when the owner of a business reviews the books to see if the business is succeeding or failing. Money is allotted to the salaries and if that cuts into the owner’s profit and keeping the store afloat, then hours get cut, salaries get cut, or people get fired. If you start at $15 an hour, the employer is facing the inevitable $20 an hour in future raises for someone to flip burgers and throw salt on fries. It’s an absurd request to be paid that amount of money for that job others are getting paid less for doing more, like people in the military or in offices. The term “minimum wage” should be stricken from the American language. It should be called what it is : “Beginner’s Pay”.

Cecelia O'Brien (R) joins other workers to protest outside a McDonald's restaurant on November 10, 2015 in Miami, Florida. The protesters are demanding action from state legislators and presidential candidates to raise the minimum wage to $15 an hour.
Workers protest outside a McDonald’s restaurant for a $15 an hour minimum wage and union rights.

With Wendy’s allowing franchise owners to install self serve kiosks in over 6 THOUSAND of its restaurants, 1000s of Wendy’s employees will join the growing number of unemployed in Obama’s economy. Everyone is fooling themselves if they don’t think otherwise. It’s the consequence of all those employees getting a huge increase in pay. Do the math. More than likely, to stay competitive, the other major chains (McDonald’s. Burger King, White Castle, etc) will follow suit. It’s going back to those days where people got their food from vending machines like the ones you see in the films from the 1940s!  Instead of fixing the economic mess we are in, raising the minimum wage will make things worse for a number of people. Jobs will be eliminated, opportunities will not be available, people will go on unemployment, some might go bankrupt, some might go on welfare and food stamps. Who knows how one individual’s situation will be affected by this labor pay increase.

It’s as easy as that.The needs of the many outweigh the needs of the few. So the workers become replaceable. It’s a simple case of be careful what you wish for from the magic Genie. The Genie in this situation is the government. You got your $15 an hour minimum pay, but in return, you won’t get the opportunity for that job especially if you are a teenager or in your twenties. Older skilled workers will go after those jobs and they will get them. Employers will give that pay to older, responsible workers, who already have skills and don’t need to be trained and supervised as much as young adult workers do. Why should a teenager get that kind of pay when there are adults with families to support? The younger worker cannot cry discrimination because the older workers can also cry discrimination against their older age too. Now what? The younger worker can go cry in a safe room, hopefully, because crime is always the alternative when there are no jobs.