In my Wall Street Journal opinion-editorial posted today, I outline the realities and potentially devastating economic effects of the National Labor Relations Board’s (NLRB) ruling that McDonald’s Corp. could be treated as a joint employer of its franchisees’ workers. The NLRB’s determination directly threatens the franchise business model that has encouraged countless American small business owners, creating jobs and broad-based economic growth. To read the full op-ed titled “Why Do the Feds Want to Dismantle the Golden Arches?” click here.
Last week, CNBC.com posted my editorial regarding U.S. Treasury Secretary Jack Lew’s call for “economic patriotism.” Mr. Lew recently stated that “[w]e should not be providing support for corporations that seek to shift their profits overseas to avoid paying their fair share of taxes.” He is implying that U.S. companies are engaging in wrongful and disloyal conduct, in reality, they’re simply reacting to our outdated tax system by attempting to put themselves on the same footing as their foreign competitors. As with many Obama administration economic policies, the Secretary’s statements sound so reasonable but ignore so much.
To read the complete editorial posted today on CNBC.com, click here
On July 7th, the Huffington Post posted an article entitled “Millionaire Fast-Food CEO: Higher Minimum Wage Hurts Us All.” It was a critical response to a July 1st interview in which I made the point that, while people certainly have the right to raise the minimum wage, significant minimum wage increases will result in the loss of job opportunities for millions of young Americans. To continue reading my response to HuffPo that was posted by CNBC, click here.
Today, Yahoo! Finance posted an interview with me where I discussed the difficult time young people are having finding work. While I agree states and municipalities have the right to raise the minimum wage, people need to understand the consequences of government mandated wage hikes. Minimum wage laws at the state or municipal level rather than the federal level makes sense as different regions have different economic concerns. Unfortunately, the consequences of artificial wage hikes include higher prices and fewer entry level jobs which principally hurt the young Americans who need those jobs, particularly minorities. Real economic growth increases the demand for labor naturally, thus increasing wages. Government mandating increased wages without underlying economic growth cannot produce the same benefits as genuine economic growth and will actually hurt many of those the mandate purports to help.
The interest in youth unemployment numbers continues. This morning, I was interviewed by CNBC’s Rick Santelli on the subject. We discussed the declining labor participation rate and the plight of young Americans who can’t find entry-level jobs. Thanks to minimum wage hikes, we’re pricing them out of the market.
I always welcome a healthy debate. It’s part of our American culture, our political system and our media landscape.
Earlier in June, I wrote an op-ed for the Wall Street Journal entitled “Why Young People Can’t Find Work.” The next day, Derek Thompson, an editor from The Atlantic, posted a rebuttal entitled “The Real Reason Young People Can’t Find Jobs.” I appreciate the fact that Thompson is engaging on this issue, so I wrote a response to his rebuttal titled “Why I’m worried about Youth Unemployment” which CNBC posted today. The CNBC post includes my response to Thompson as well as links to my original WSJ article and Thompson’s rebuttal.
On June 24, 2014, a panel of industry, labor and legal representatives testified before the Subcommittee on Health, Employment, Labor and Pensions of the House Committee on Education and the Workforce. The hearing covered a position the National Labor Relations Board (NLRB) may take on joint-employer status that would negatively affect businesses, particularly the franchise segment. As the CEO of a franchisor, and as an International Franchise Association (IFA) Board Member, I testified about the harmful effects of joint-employer status on franchising. It’s important to understand that the relationship between franchisors and franchisees is one of mutual benefit, but separate operation. Franchisees are entrepreneurs who hire, manage and fire their own employees. There’s no reason for government to mandate needless changes to an entrepreneurial system that works.
A link to the IFA’s report on the issue, the hearing and a Wall Street Journal Live segment is here.
A link to the complete hearing is here. If you don’t have time to watch the entire session, a good starting point for context is at 48:13.
It’s June. Graduation season. The time when a new batch of well-educated, eager and energetic young college students step out, secure jobs and launch careers. Or, can they? Young people today find it nearly impossible to find jobs because there are fewer jobs out there. In my recent Wall Street Journal opinion editorial, I discuss the fact that, despite the Administration’s rhetoric about economic opportunities, the government continues to create policies that limit job growth.
Last week I met with CNBC reporter Katie Little and we discussed various roadblocks our current Administration has set that make it hard for entrepreneurs to build business and create jobs. Sadly, these regulatory roadblocks end up hurting the very people they are trying to help.
The truth is, according to BLS data, businesses with 500 or fewer workers created about two-thirds of net new jobs over the past decade. As I said to Katie during our discussion, businesses “don’t just grow because it’s Tuesday . . . . They grow because they think they can make a profit.” To encourage business growth and boost the U.S. economy, we need more business-sympathetic policies in place. To encourage business growth and boost the U.S. economy, we need more business-sympathetic policies in place.
You can read the CNBC story here: Fast food CEO: Minimum wage hikes closing locations.
On a recent Fox News segment with Stuart Varney, I discussed the devastating impact government is having on American businesses and job creation, including minimum wage increases.
It’s simple math. If you raise the cost of something, business will use less of it. The restaurant and other retail industries hire many workers in the 16 to 24 year-old age bracket as the current minimum wage allows employers to hire people with little to no skills. This allows young people to learn and advance as they put in the work. If the wage is increased, businesses will hire fewer people, which will adversely affect millennials with little experience. In fact, according to the CBO from February this year, the minimum wage increase to $10.10 could cost 500,000 jobs.
It’s unfortunate that the Administration continues to see business as the bad guy. Higher taxes, increasing health-care costs, rising fuel prices and an un-navigable regulatory maze stymie business growth and discourages entrepreneurs to build, open and hire.
