Restaurant CEO reveals unexpected effect of minimum wage hikes

The CEO of national food chain Dave & Busters has weighed in on the current trend of massive increases to the minimum wage following the latest such hike in the District of Columbia. He shares some of the same concerns as other business owners regarding unmanageable labor costs and the temptation of automation replacing lower skill level workers, but he also addresses a topic which is rarely heard in this debate. As Stephen King describes it to Fox Business News, when he has to cut back on that portion of the workforce, their own opportunities for advancement and success are diminished. (Emphasis added)

During an interview with FOX Business Network’s Cavuto: Coast-to-Coast, Dave & Buster’s CEO Stephen King discussed how wage increases impact his business.

“As we look at the environment today, we talked about in our call yesterday; we’re facing 4% wage inflation that’s clearly faster than the CPI or something like that. There are pressures on our overall cost structure as a result of it,” King told host Charles Payne…

When it comes to providing opportunities for low-wage earners, King says restaurant businesses continue to be one of the places where a bottom wage earner can work their way up to a multi-unit operator.

“Many of our multi-unit operators, the folks that are out there running 10 restaurants or more, are folks who started as hourly employees,” King said.

This is one aspect of lower-wage work which is frequently overlooked in this ongoing debate. I think most of us can agree that a job flipping burgers or bussing tables isn’t the career that many people are seeking out for the long term. For most, these jobs are viewed as either a way to initially get into the work force or a stopgap measure while looking or something better. But while many may leave these jobs when the opportunity presents itself, it’s worth noting that a certain number of workers do stick around and advance into middle management positions when they build up enough experience and seniority. This goes for many other players in the retail sector, and it can turn into a sustainable career.

The days of starting out in the mail room of a Fortune 500 company and winding up as the CEO are essentially gone, but Mr. King brings up a good point. You may not wind up with his job, but a lot of the managers who operate multiple outlets in his company started out as kitchen and dining room workers and rose up through the ranks to be managers who do quite well for themselves. Every time a sudden spike in labor costs sends more of these workers to the unemployment lines or replaces them with robots, that’s one less chance for someone to follow that type of career path.


Trending on Hotair Video