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White Castle CEO Responds to NY Minimum Wage Hike, Says They May Have to Raise Prices

White Castle CEO Responds to NY Minimum Wage Hike, Says They May Have to Raise Prices
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Despite the massive amount of proof — and plain common sense — available out there thanks to the Internet, wacky liberals still refuse to believe that raising the minimum wage to $15 an hour will have a negative impact on businesses.

I believe the word “delusional” best describes this view.

Anyway, how the White Castle restaurant chain plans on dealing with the huge hike will simply bring tears to your eyes.

From National Review:

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‘This is something that’s become a bumper sticker,” Jamie Richardson tells me. “But it hasn’t really been thought through. There is a better way to get people out of poverty than hiking the minimum wage.”

Richardson is a vice president at White Castle, the chain of famously white-painted and turreted burger joints specializing in slider-style hamburgers in the Midwest and Mid Atlantic. (Let me pause for a moment: If you’ve somehow made it through life without visiting this family-owned American treasure, stop reading this article, make like Harold and Kumar, and get yourself to the Castle . . . I’ll wait.)

White Castle, established in 1921 in Wichita, Kan., now operates more than 400 locations, with many in the New York City metropolitan area, which makes the news of New York governor Andrew Cuomo’s signing a bill that steeply hikes the minimum wage deeply personal. The wage will go from $9 to $15 an hour by 2018 in New York City, with the rest of the state seeing a more gradual phase-in schedule.

“Is there any room to raise prices to cover costs?” Richardson muses. “We think we’d need to increase menu prices by something like 50 percent. It’s not something we’ve done before. It’d be catastrophic.”

Richardson says — and common sense dictates — that if menu prices at fast-food chains shoot up by anywhere near 50 percent, many people will stop eating out as much, replacing trips to White Castle with trips to the grocery store. Customers can always vote with their feet and their dollars.

“Candidly, this could create a whole generation of kids who won’t get their first job,” Richardson laments. “We’re in tough neighborhoods — and White Castle hasn’t abandoned those neighborhoods. On the surface, higher pay seems noble, but it’s not – because it denies the reality of the free-enterprise framework that has allowed small businesses like ours to thrive.”

“As a family-owned business, White Castle has been around a long time — but now we have to assess things and ask: Where do we need to be at, by when, to make sure our business remains viable?” Richardson says. “New York says, ‘We’re open for business,’ but sometimes it seems like the only door that’s going to be open is the exit door.”

How sad is it that good companies like White Castle will not only have to jack up prices and pass the cost of a minimum wage hike on to the customer, but also reduce the number of jobs available, preventing unskilled workers from getting their foot on the first rung of success?

Unfortunately, this is exactly what happens when liberal “do-gooders” with no basic understanding of how economics actually works, start going on crusades for what they perceive as “fairness.”

What they don’t realize is their solution to the problem actually creates more of the problem. Instead of making things even so people can afford their bills, it eventually causes a higher cost of living.

Liberals never seem to learn this, and it’s always those in poverty — the ones they claim to be helping — who pay the price.

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