Operating expenses in the past year have risen for many companies in part of wage increases. Cities including Seattle, Los Angeles, and San Francisco have all passed laws gradually increasing minimum wage to fifteen dollars.
Starbucks announced Thursday operating expenses had risen 18% in a year; although, one of the primary reasons was for investing in employees. Starbucks has chosen to provide higher pay and greater benefits than most quick service restaurants in the industry.
Dunkin’ Donuts CEO, Nigel Travis, argues $15 minimum wage is “outrageous” and suggest $12 is a more reasonable increase.
Howard Schultz, Starbucks CEO, has also spoken against minimum wage increases and its unintended side effects. Over the past year he has constantly warned industry leaders of the dramatic increase.
Both companies have been able to absorb high labor cost comfortably.
Initially higher wage will effect small business competitive edge against bigger enterprises.
Big corporations would have to worry about their franchisees, who essentially are small business operators within companies. McDonald’s CEO said Thursday, minimum wage increase could possibly be a big issue for McDonald’s franchisees.
Naturally business operators in the industry are concerned.
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