Andrew Puzder Understands Economics, Igor Volsky Does Not | The American Spectator | USA News and Politics
Andrew Puzder Understands Economics, Igor Volsky Does Not
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Igor Volsky, Think Progress alumnus and current Deputy Director for the Center for American Progress Action Fund, voiced outrage at President-elec Donalt Trump’s pick for Secretary of Labor, Andrew Puzder. Mr. Puzder is a CEO famous for his sexy burger advertisements. For your enjoyment, a sample, below:

Yes, feminists are outraged at Puzder, but that’s old news. The new outrage is from leftist activist/talking heads who seem not to understand basic economics. It seems that Mr. Puzder has expressed his perspective on various free market policies and they’re at odds with leftist ideology.

While no storied economist like Ben Stein, I’ve owned a business and worked for a business. With a little dose of common sense, I’d like to go through each of Mr. Volsky’s points and explain Mr. Puzder’s perspective.

  1. Puzder opposes raising min wage&has replaced fast food workers w/machines: This is a doozy. Mr. Puzder knows that his franchisees must shoulder the biggest cost, which is wages. Their stores operate at margins lower than 3 percent. Carl’s Jr. encourages multiple locations per owner to increase profits and benefit from economies of scale. How quickly does increasing all fast food workers wages increase costs? Immediately. Due to fierce competition, fast food companies can’t just charge $10 for a burger without losing their customer base. As to the machine replacement…well, duh! Because wages are the biggest cost to business owners, the only choice is to automate as much as possible. Automating decreases mistakes and waste and minimizes exposure to human complications. Not to mention that activists wanting $15/hour minimum wages makes companies look for alternatives that won’t continually eat into the bottom line.

  2. In 2001, Puzder’s CKE Restaurants spent $53,829.96 hiring a union buster to try to persuade employees not to vote for a union Why would Mr. Puzder want his workers unionized? Unionization would mean the end of the business. Fast food joints don’t have huge, cushy margins. Because they’re a service industry, they also lose their profits should their employees “slow down” or go on strike. This is an impossible situation for the franchise owners who must serve their customers in a timely manner.

  3. “The feds can mandate a higher wage, but some jobs don’t produce enough economic value to bear the increase.” This is an obvious statement. Certain jobs demand more pay, because they require more skill or there are too few qualified workers. Certain jobs just don’t warrant higher pay. The most productive worker only produces enough to create the minimum of value. These jobs get lower wages and attract less skilled workers or those just entering the workforce. It’s a win-win. The employer gets cheap labor. The new worker gets experience. There was a time when high school students worked at fast food restaurants. Low wages, free fries, low-knowledge work was made for young people. They’d make gas money and learn a work ethic. Or not. As minimum wage has increased, teen workers have been priced out of the market. With higher wages come higher skills expectations.
  4. Puzder opposed Obama administration’s overtime rule, which would have extended overtime protections to 4.2M workers. Again. One wonders if these talking head activists want anyone to have a job at all. Volsky is referring to President Obama’s capricious overtime rule that forces employers paying $47,476 or less to pay 1.5 times the hourly pay for any hours over 40 hours. This law will hurt employees. How? Well, businesses will just lower a job’s wages to compensate for the overtime expected. Or, they’ll let certain roles go. One of the benefits of being a white collar salaried worker is flexibility. That will be eliminated as employers closely track their employees to make sure they work 40 hours or less. Another obvious solution is more part-time and contract workers.

Business owners know these consequences implicitly. They must constantly balance their costs versus their production to maximize profit. Yes, business owners want to make a profit. Otherwise, why own a business?

Forced wages, forced overtime, and forced unions impose costs on the employer who then has to increase the cost of the product in order to turn a profit. Who does this harm?

Who relies on this food for sustenance and looks for a good warm meal at a cheap price? That’s right, people who can’t afford to go to more expensive restaurants and harried mothers with children who want a cheap toy.

When the price of a burger is $9, low income people are harmed most. Now, they cannot get a job (because it’s automated or they don’t have the skills to justify the wage), and they cannot afford the burger that used to be their treat. It’s just too expensive.

Young liberal commentators don’t seem to consider these realities, when opining about the glories of wage-fixing. Their beliefs and policies rob young people of the dignity and learning experience of a low-paying job. They harm employers trying to employ people and make a buck. They price more people out of the job market. They increase the costs of goods and services harming the most economically vulnerable.

Terrible ideas that sound good on paper make the liberal world rotate. Damn the consequences, there’s people to “help.” As is almost always the case, they harm the very people they claim to want to help.

It’s heartening that Andrew Puzder does understand these realities. Freeing the market will no doubt create more jobs. Watch and learn, Mr. Volsky. Watch and learn.

Melissa Mackenzie
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Melissa Mackenzie is Publisher of The American Spectator. Melissa commentates for the BBC and has appeared on Fox. Her work has been featured at The Guardian, PJ Media, and was a front page contributor to RedState. Melissa commutes from Houston, Texas to Alexandria, VA. She lives in Houston with her two sons, one daughter, and two diva rescue cats. You can follow Ms. Mackenzie on Twitter: @MelissaTweets.
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