NRO | How White Castle Will Adjust to a $15 Minimum Wage in New York

via National Review:

 

White Castle (200x200)How White Castle Will Adjust to a $15 Minimum Wage in New York

by Mark Antonio Wright | April 11, 2016

… What this means for White Castle is we really have to evaluate how we manage our business,” Richardson [White Castle vice president] tells me. “About 30 percent of every sales dollar covers the pay of our hourly workers, and that doesn’t include management.”

… If labor costs rise dramatically, White Castle will have to balance its books by raising prices or changing its business model so that it needs less labor.

“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. But thinking through the implications of raising prices to cover increased costs, which could reduce sales, isn’t what irks Richardson the most: To him and to White Castle, New York’s minimum-wage hike is a threat to a culture of opportunity in the neighborhoods that they have always called home. “Candidly, this could create a whole generation of kids who won’t get their first job,” Richardson laments.

White Castle is very proud of providing what for many of its workers is the first rung on the ladder of employment. And it loves to promote from within. Richardson tells me that of White Castle’s 450 top employees in restaurant operations, “444 of them started out behind the counter in an hourly job.” (Read More)

 

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