Fast Food CEO Not Freaking Out Over Minimum Wage Increase
Republican politicians around the country are howling that raising the minimum wage is an outrage and horrible for businesses. But the CEO of Subway, which has more locations than any other restaurant chain, thinks a minimum wage increase isn't such a big deal. "I'm not concerned," CEO Fred DeLuca told CNBC, though "I know our stores owners are concerned."
When I started in the business, the minimum wage was $1.25. I've seen an enormous number of wage increases. Basically it applies evenly to everyone in the business. This increase would impact Subway plus every other competitor so it would not put any brand at a particular disadvantage. It might have a slight impact on consumers because what's going to happen is a wage increase will happen and all the restaurant owners will have to recoup that somehow, usually through a price increase. It might make eating out at restaurants have a little bit less competitive advantage compared to supermarkets.
Over the years, I've seen so many of these wage increases. I think it's normal. It won't have a negative impact hopefully, and that's what I tell my workers. I always have whenever we come across these things.
Subway is not exactly a leader in good wages in the fast food industry, yet that's a far cry from the fearmongering we hear so often about businesses going under left and right, prices skyrocketing, and women and children weeping and wailing in the streets. And DeLuca's take is very much in line with the 57 percent of small business owners who say they want the minimum wage raised, and in particular, with the 35 percent who say it would help them by keeping competitors from undercutting them on wages.
What's more, DeLuca would like to see the minimum wage indexed to inflation, so that it rises gradually rather than in occasional larger jumps. "That way everybody knows what they can count on," he says. "It just seems much more sensible and fair to me."
Crazy talk, man.