Raising the minimum wage is a mistake, and I’ll tell you why.
I was the General Manager of a franchised pizza chain for many years, and as that GM, I hired people to work on my team. What most people who advocate for a higher minimum wage do not realize is that these major corporations aren’t taking the increase out of their pocket. Franchises pay a percentage of gross sales, off the top, to the corporation regardless of the labor and food costs. Franchisees and the managers below them must adjust for the increase in cost.
Managers adjust for the cost of labor in a few different ways. One is the knee-jerk reaction of price increases. So, you, the customer, end up paying more for your products. Ever wonder why menu price is drastically different from national promotions? Therefore, this price increase, across many businesses is what causes inflation. Now, inflation will happen regardless at 1-2% per year, so that isn't my primary concern.
Another way that managers adjust for higher labor costs is with automation. Online ordering was our increase in automation during my tenure. The shift to sales through apps from sales over the phone led to the need to hire fewer front counter workers. On a Friday or Saturday night, there used to be two or three employees dedicated to the front counter. Now, either an overworked manager in a rushed frame of mind or a part-time delivery driver who has less experience will serve you. Other fast food establishments will replace workers with self-ordering kiosks; retailers will install self-checkout aisles. Raising the cost of the employee will decrease the return on investment for these technological upgrades, making them more profitable and more reliable than employees. I know from experience that the average order from the online pizza ordering app was a dollar or two higher, further increasing the ROI on the upgrade.
A third way managers deal with increased labor is with being selective with their hiring practices. Now, this is the reason I am against minimum wage increases. Minimum wage jobs are often an entry-level job back into society from being out of the workforce for a myriad of reasons. Maybe they were injured severely and can only work on their feet a few hours a day. Maybe the applicant was recently through drug rehab and is trying to get back on their feet. Maybe the person was unemployed, and their benefits ran out.
When you increase the cost of hiring and training someone, you increase the cost of turnover. In the mind of a manager, hiring and training someone who is on the fringe of society is a greater risk that they will not work out. So you are looking to hire one or two delivery drivers, maybe one part-time pizza maker, who do you choose? Do you take a chance with someone on the fringe, or do you hire the retiree who is looking to supplement their social security? How about the student whose cell phone is grafted to their hand? From experience, you will have less risk and more reliability with the retiree.
Increasing the cost of hiring someone reentering the workforce shuts these people out, and makes them more likely to work under the table or in the black market. That is why I am against increasing the minimum wage.
When you trust me to be your Representative in Concord, I will not be an empty suit, willing to vote however my party leadership tells me to vote, like my opponents will be forced to do. I will apply logic, reason, and thought to every decision I make on your behalf. We might not agree on every position, but I will have an explanation for every vote.
The special election for State Representative for Strafford 13, Dover's First Ward, is on October 24th. If anyone has any questions about my policies or thoughts on topics, please feel free to send me an email or give me a call.
Libertarian Candidate for State Representative
Strafford 13 - Dover Ward 1