Goolsbee: Minimum Wage is a Modest-Impact Policy
One fear that many small business owners face each day is the potential for a higher minimum wage. Certain businesses won’t be able to afford paying their employees the $15 amount that some lawmakers are pushing for.
Former Chairman of the Council of Economic Advisors under the Obama Administration, Austan Goolsbee, argues that research shows raising the minimum wage isn’t as big a deal to the U.S. economy and businesses as it seems.
“The minimum wage does not seem to have much of an employment effect and it doesn’t seem to have very much of an income distribution effect—it’s a modest-impact policy,” he told the FOX Business Network’s Trish Regan. “It’s why a lot of progressives try to advocate the minimum wage, coupled with things like earned income tax credit or other factors."
He added: “I think minimum wage itself is a bit of a red herring because it’s not big enough to move the needle in most of these things.”
On the contrary, Andy Puzder, CKE Restaurants CEO explained how business owners will feel the effects of a minimum wage hike.
“Over a period time it’ll affect our franchisees who are really small business owners who own most of the restaurants,” he said. “Marginally profitable businesses will close, some businesses may move out of state. If you’re going to stay in business you’re going to increase your prices to the maximum amount you can. You’re going to be more efficient with the labor you keep and you’re going to automate whatever positions you can automate.”
However, Puzder said he isn’t totally against raising the minimum wage rationally. But, he does have an issue when increasing it could put some Americans out of work.
“I’m opposed to raising it to the point where lower-skilled workers, working-class Americans, young people, minorities are losing the jobs they need to get on the ladder of success. And I think $15 an hour does that,” he said.