Posts by Deirdre Hughes

  • The downside of minimum wage hikes

    Deirdre Hughes at Yahoo Finance2 mths ago

    California this week mandated a minimum wage of at least $9 an hour, making it the third state to do so, and several more plan to follow suit. President Obama has called for Congress to raise the federal minimum wage to $10.10 an hour, but that proposal has not and is not likely to gain any traction in Washington. Why? Because there are many - like CKE Restaurants CEO Andy Puzder - who argue that "artificially” raising the minimum wage when it’s not justified by economic growth is actually detrimental to workers and the economy.

    “When there’s a demand for labor, the cost of labor goes up. When there’s no demand for labor, it goes down and you can’t solve that problem by having the government artificially mandate a wage increase when there’s no economic growth to support that,” says Puzder. “What businesses do is they increase their prices and they move to automation so you have less jobs.”

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