KQED: Fast Food CEO Says Higher Minimum Wage Boosts Business

By Sam Harnett
KQED (NPR), Jan 3, 2017

When California began raising its minimum wage two years ago, Bill Phelps wasn’t happy. Phelps is CEO of a fast food company called Wetzel’s Pretzels, which has almost 100 outlets in California. ... But something else happened entirely. Sales at his California stores immediately shot up.

“I was shocked,” Phelps says. “I was stunned by the business.”

The same exact pattern took place again in 2016, when the minimum wage rose again, Phelps said. There was a wage increase, and then boom, a bump in same-store sales across the state that held for most of the year.

Phelps is now convinced minimum wage increases aren’t bad for the fast food business; in fact, he says, they’re great. Phelps said you can see why if you visit the Wetzel’s Pretzels franchise in Concord’s Sunvalley Shopping Center. ... Business has been good the last few years, said franchise owner Mike Jacobs.

“My overall sales were something like 15 percent ahead after the first minimum wage bump, and now they’re about 12 percent ahead this year,” Jacobs said. “It isn’t because I’m such a great manager or smart guy, but the buying public has more money in their pocket.” Jacobs says not only are more people coming to shop, but they’re buying more.  ...

At the mall in Concord, store owner Jacobs doesn’t need an economics case study to know he’s been doing well. “By my looking at it, the minimum wage increase has just been a godsend,” Jacobs said. “My income this year will be double what it was in 2013.” ...

With the minimum wage going up, he believes everybody is a winner. His employees have gotten a raise. His CEO is getting big numbers. His customers can buy more pretzels. And Jacobs can buy more guitars.

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