Pretzel Logic: CEO Admits He Didn’t Know What He Was Talking About When He Advocated a $15.00 Minimum Wage

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By Robert Wenzel

Bill Phelps, co-founder and chief executive officer of the California-based Wetzel’s Pretzels franchise, was a prominent advocate for the Golden State’s $ 15 a hour minimum wage for several years, but has recently changed his opinion, reports the Washington Examiner. He now says that the rate — which has only just reached $ 11 — is already squeezing his businesses and hurting workers, and he worries things will likely get worse as minimum wage rises to the $ 15 level.

The CEO in 2016 wrote a pretzel twisted advocacy of a higher minimum wage in an op-ed for Forbes where he said, get this, “I’ve paid very close attention to our business as California has raised the minimum wage over the past couple of years. And what I found was stunning. When California increased the state minimum wage from $ 8 to $ 9 an hour in July 2014, our same-store sales doubled in the next two weeks and stayed that way for six months. When the minimum increased again in January of this year to $ 10, the same thing happened; our same-store growth rate more than doubled.”

But now with the minimum wage at $ 11.00  he says, ” I see a change happening now. I think fast food in general is flat to declining and you’ve got wage increases and the operators are getting squeezed.”

“I was very bullish on the minimum wage increase. It was working really well for us. It was working okay for the fast food industry but there is no question you are going to have to see a reduction in the number of restaurants that are out there. You are going to see a reduction in service. And you are going to see more people going to technology to reduce labor costs,” Phelps said.

“I see it — and everyone else I talk to in the restaurant business sees it — as a huge challenge. It is a total squeeze on the franchisees and I think it is going to result in less jobs, less restaurants and less service. That’s how I see it today,” Phelps said in a phone interview with the  Examiner.

“I see the next wave of increases as these cities and states go from $ 11 to $ 15 as being hugely problematic. And that’s where the issue is,” Phelps said. He said that states such as California would likely see a growing chorus from business to halt the increases. He said he was willing to do some lobbying himself, if necessary. “My concern is that by the time we react it’ll be too late.”

Phelps said that at Wetzel’s, and the entire fast food industry, automation of stores was one avenue that is being strongly looked at.

It is certainly a twist from 2016 when Phelps wrote:

Numbers don’t lie. Increasing the pay of millions of Californians has not increased unemployment.

I understand business owners being concerned about an increase in labor costs. But the new wage will be phased in over six years – reaching $ 15 in January 2022 – giving them time to adjust…

Workers in California and other states are looking forward to consistent pay increases in the future. And I’m looking forward to continued growth for our business.

This article was originally published at EconomicPolicyJournal.com

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Union-Backed Democratic Congressman Rejects $15/hr Minimum Wage

Longtime incumbent Democratic Rep. Dan Lipinski and his primary rival, Marie Newman, revealed gaping ideological differences over key issues during an interview with the Chicago Sun-Times editorial board over the weekend.

The gap could prove pivotal in an Illinois district that went for Bernie Sanders in the 2016 presidential primary by 8 points.

In major areas, Lipinski and Newman were far apart. Newman has the backing of both women’s groups and those fighting for LGBT rights, as well as national progressive groups that argue Lipinski is out of step with his district. Lipinski, backed by the state machine, has significant labor backing — which makes his rejection during the interview of one of labor’s key priorities noteworthy. Audio of the exchange was provided to The Intercept by the Newman campaign.

An editorial board member during the interview noted that Lipinski had not endorsed a $ 15 per hour minimum wage on his questionnaire and asked why. “We definitely have to raise the minimum wage,” Lipinski said. “If you look at the history of the minimum wage, the highest that it was in current dollars was in 1968, which would be the equivalent of about $ 11.60. I think we should move up to now — probably go to a $ 12 federal minimum wage and index it for inflation.”

Newman pressed him. “May I ask the congressman something? So how would you propose a family of –let’s just say– even two kids, when both of the parents make — let’s call it your $ 12 dollars an hour — how would you propose that they live on that?” she asked.

“Well, I think you have to look at the whole picture of our federal minimum wage right now — seven and a quarter, it needs to be raised. We have to look at the impact that’s going to have,” he said.

One hundred and sixty-seven House Democrats back the Raise the Wage Act, which would raise the federal minimum wage to $ 15 an hour over seven years. Lipinski is not a co-sponsor of the bill, but until this interview has not explained precisely why.

As recently as October 2017, delegates to the AFL-CIO’s annual convention voted for a resolution reaffirming the organization’s support for $ 15 an hour at both the state and federal level. Lipinski’s support from unions is likely the only thing standing between him and un upset loss in the primary.

A spokesman for the AFL-CIO in Washington referred questions to the local affiliate, which didn’t respond with comment by the time of publication.

Newman, in the editorial board meeting, reaffirmed her support for the higher wage. In a subsequent interview with The Intercept, she said that it would not have the negative impact on the economy Lipinski worried about. “It actually helps the economy,” she said. “When people have disposable income it goes back into the economy. It’s economics 101.”

Lipinski inherited his seat from his father. After the 2004 primary was over, Bill Lipinski stepped aside and allowed his son to take his place on the ballot, assuring his election.

Newman and Lipinski also sparred over his record on the DREAM Act, which he voted against on the House floor but now says he supports.

At a time when the Democratic Party is virtually united behind support for marriage equality, Lipinski did not announce an evolution of his longstanding opposition, but did highlight some of the votes he’d taken on behalf of gay rights. “When it comes to on gay rights, I voted about 10 years ago to add sexual orientation to federal hate crimes legislation. I voted to end Don’t Ask Don’t Tell,” he said.

Newman pressed him on his support for the First Amendment Defense Act (FADA), which would allow people to cite religion in order to discriminate against members of the LGBTQ community. Lipinski explained:

I co-sponsored — I wasn’t part of writing it, but I cosponsored that bill because, during the Obergefell Supreme Court consideration, the solicitor general of the United States was asked a question: If we say that same-sex marriage is guaranteed in the constitution, does this mean that churches will no longer have tax-exempt status? That was my primary reason for cosponsoring that. After I cosponsored it, I had a number of people came to me and said, we’d like you to — we have problems with this bill, we’d like you to not cosponsor this in the upcoming Congress, and I said I’m happy to sit down and talk to you if the bill is reintroduced. The bill has not been reintroduced in this Congress, but I’m said I’m happy to listen and talk where you think you see problems with this with this bill.

On the question of abortion, Lipinski didn’t waiver from his longstanding opposition. “On abortion, yes, I am pro-life — science shows us that life begins at conception and that is a value that I think, as a Democrat who believes the government has a role in protecting those who are vulnerable, that we should protect,” Lipinski said. The argument that “life begins at conception” is often used to object to certain forms of birth control as well as abortion.

He is rated 100 percent by the National Right to Life committee.

Lipinski, though, appears to be feeling pressure from Newman, and was a no-show for his speaking slot at the recent March for Life in Washington, D.C.

Despite Lipinski’s opposition to legal abortion, and Newman’s support for it, she has not been endorsed by EMILY’s List, a Washington, D.C.-based group dedicated to electing pro-choice women, nor by Planned Parenthood.

Newman has been endorsed, however, by NARAL and two sitting members of Congress from Illinois.

The primary will take place on March 20.

Top photo: Congressional Steel Caucus member, Rep. Dan Lipinski, D-Ill. speaks on Capitol Hill in Washington, Thursday, April 14, 2016, during a hearing on the State of the U.S.

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