CEO of CKE Restaurants Andy Puzder warned Connecticut's minimum wage increase is based on faulty assumptions about economics Thursday on Fox News.
Gov. Dan Malloy (D) plans to sign the bill into law which would increase the minimum wage $10.10 in Connecticut, the highest of any state.
Puzder slammed Gov. Malloy's argument that the new minimum wage will benefit low wage workers, suggesting the governor could use a course in economics.
"When you raise the minimum wage, everybody who has to pay the minimum wage raises their prices to cover the costs of the wage increase. So, what they're buying costs more, and if you have inflation in products and wages you don't end up in a different place," he said.
In addition to the increased cost of goods, Puzder also pointed out raising the minimum wage will cost jobs, directly hurting the people it is supposed to help.
"I think politically it's probably a very good issue for people that support a minimum wage increase because I think people feel very good when you say, we're going to increase, the next check you're going to have more money. You feel good about that but you don't realize things are going to cost more, there's going to be fewer jobs, and those 500,000 people if we did this federally that won't have jobs, they're not going to have any wages. So economically it's not a good move."
Full exchange:
NEIL CAVUTO: The governor, Governor Malloy, disagrees with that notion, he says guys like you are forgetting the benefits of doing that and the people who get paid more will spend more, in fact in that income range, that they will spend virtually all of it. So it actually helps the economy. What are you saying?
ANDY PUZDER: Well, I think that the governor could use a course in economics. If you -- when you raise the minimum wage, everybody who has to pay the minimum wage raises their prices to cover the cost of the wage increase. So, what they're buying costs more, so if you have inflation in products and inflation in wages, you don't end up in a different place so which is why every few years people talk about increasing the minimum wage. This misallocates expenses. This is not something, particularly the federal government is very good at, when they're trying to set prices, they're trying to set the cost of labor. You can say that it does that, and I think politically it's probably a very good issue for people that support a minimum wage increase because I think people feel very good when you say, we're going to increase, the next check you're going to have more money. You feel good about that but you don't realize things are going to cost more, there's going to be fewer jobs, and those 500,000 people if we did this federally that won't have jobs, they're not going to have any wages. So economically it's not a good move.
Full interview: