Economy
10:01 am
Fri September 13, 2013

Recipe For A Great Burger? Fifteen Bucks An Hour

Originally published on Fri September 13, 2013 12:30 pm

Transcript

MICHEL MARTIN, HOST:

This is TELL ME MORE from NPR News. I'm Michel Martin. It is Friday and back in the day this was payday for most people, so we thought this was as good a day as any to talk about wealth, wages and poverty. In a few minutes we will hear about how poverty seems to be affecting the health of white women in a dramatic way.

But first, we want to talk about something that's really moved to the forefront of public discussion these days, and that is wages. It's been 75 years since the Fair Labor Standards Act set a federal minimum wage in this country, but the debate over what actually constitutes a fair wage seems to be as intense as ever. This week, lawmakers in California voted to raise that state's minimum wage to $10 an hour. Just yesterday the mayor of Washington, D.C., Vincent Gray, vetoed a measure previously passed by the city's council that would have raised the minimum wage dramatically for workers at a select group of big-box stores like Walmart.

Now this comes at a time when fast food workers have been staging short strikes across the country to protest wages many consider too low. Now we want to talk with the owner of one casual dining chain who's moving in the opposite direction. The owners of Moo Cluck Moo in Dearborn Heights, Michigan are currently paying their workers $12 an hour and they want to raise that number to $15 an hour. That would be more than double the current federal minimum wage. We wanted to talk more about this, so we've called on the owner Brian Parker and he's with us now. Thank you so much for joining us.

BRIAN PARKER: Michel, thank you very much for having me.

MARTIN: Also with us is Marilyn Geewax. She's a senior business editor at NPR and we've called her for additional context around the minimum wage. Marilyn, welcome back to you.

MARILYN GEEWAX, BYLINE: Hi, Michel.

MARTIN: Thank you so much for joining us. So, Brian, let me start with you - when you were conceiving the business, which is just been open for a couple of months now.

PARKER: Correct, we opened on April 5 of this year.

MARTIN: Was this originally part of the business plan?

PARKER: Yeah, it actually - it was.

MARTIN: And tell me why.

PARKER: I didn't really know. My partner and I didn't really know what minimum wage was and seems kind of like a myth. And so we just felt that $12 an hour was the right number to use. It just sounded good. And then shortly after we opened we had bumped those wages up slightly for some of our employees because of, you know, what they did and they stepped up and took charge and took leadership positions. We just automatically bumped their pay. So we just felt going to 15 sounded pretty good in this economy.

MARTIN: Of course, you know this by now that your decision here has sparked a huge reaction. Some people think that this is absolutely the right direction that a lot of people should go in. Other people just think it's crazy.

PARKER: Yeah, we've heard both. I would tend to agree with those that think it's a good decision. We certainly think it's a sound decision. We're not crazy and we're not going anywhere anytime soon in terms of down the sliding path. We're actually doing very well. We're healthy. We look at turning a profit this month in September, only our sixth month in business. We both believe - my partner and I believe that, you know, the time is now, and I really don't want to wait for tomorrow. We want to acknowledge and recognize our team by sort of stepping up to the plate.

MARTIN: Give us the business case for this. I mean, there are lots of ideological reasons why people might take this position, but is there a business reason for this? And then part of the reason that people might find the decision surprising, at least, is that Detroit's economy has clearly been having difficulty for quite a long time. So a lot of people would think you have a captive labor market where people will tolerate the lower wages, even if they don't like them. So give me an idea of why you think that, from a business standpoint, this is the right decision.

PARKER: Well, from a business standpoint, we are acutely aware of who pays our bills, and that's our customers. So when our customers are greeted with a smile, with somebody knowledgeable about the food and somebody that's happy to serve the food to them, we're banking on that business sense that we're going to succeed and win. And so far, in the five short months that we've been around, it's been working for us. I would say, from a consumer perspective sort of on the other side of the counter, we've heard accolades from our consumers thanking us for stepping up. We want to support you.

I had a woman yesterday just send me an e-mail that she wants to send me money. She said she'd never set foot in our store because of where she lives. If she's ever in Detroit, she may come in. But she sent us a check for her support to our company and what our business endeavors pursue. And then, you know, most importantly from our team efforts and the team perspective, what makes good business sense for them is that, again, they do care. They think about what they're doing. They're not disgruntled. They're not unhappy. And, boy, we sure as heck appreciate them being around to help us out because my partner and I can't do it all on our own.

MARTIN: Let's turn to Marilyn Geewax now for additional perspective. Marilyn, just to give us some history here, how long has there been a minimum wage in this country?

GEEWAX: Well, it's been exactly 75 years. Three-quarters of a century ago, President Franklin Roosevelt decided to push for a federal minimum wage. It went through, and we've been having this federal floor set every couple of years ever since then. Now it's been since the summer of 2009, the wage has been set the way it is now and a lot of people in Congress would like to see it go higher. President Obama himself has called for $9 an hour, some in Congress say $10 and, of course, a lot of unions and other people are calling for $12, $15 an hour - something much higher.

So, you know, when you talk to economists about this and look at the years of study, after all these decades, what do we actually know about the minimum wage? Most studies, overall, show that a higher minimum wage - a somewhat higher minimum wage - doesn't have that big of an impact, but it tends to be slightly positive because more people have money to spend. But, you know, it depends on just how high the wage goes, what the economy's doing. It's really kind of a funny thing to me to see, after all of these years, after three-quarters of a century, you think this would be an absolutely settled debate and yet, really, there are arguments on both sides.

MARTIN: It's not a settled debate. You're saying it's still highly controversial.

GEEWAX: It's still controversial. And I'll tell you, it's actually getting more controversial because when we look at it in the past, you could say, well, higher wages tend to make employers want to put in new equipment to eliminate some workers. So maybe some people lose jobs and then you have a higher unemployment rate and that hurts wages. So you could look at it that way. But you could also say, well, it's great to give consumers more money to spend. When people have a higher paycheck, they'll go out and they'll buy an extra pizza, they'll buy another hamburger. It's actually good for the economy. But going forward, there's this real question about robots. You know, that's one of the things businesses are really throwing at unions and workers right now is to threaten them with the idea that automated workers will take your place. So the...

MARTIN: If wages go too high.

GEEWAX: If wages go too high. They're arguing that if you really did get to $12, $15 an hour, there is an awful lot of equipment out there now that can sort of flip hamburgers for you. I mean, there are ways of having robots, and actually, we're seeing those around the world. There are a lot more in Asia where you really do have people putting a lot of time and money into figuring out ways to eliminate workers by automating simple tasks. So if wages do go much higher, will that result in many more robots? That's something that people will argue about.

MARTIN: Brian, what about that? Have you contemplated that - replacing some of your employees...

PARKER: With robots?

GEEWAX: Let me just say, even if it isn't exactly a robot, a thing like handing the consumers their own cup and tell them, you go pour your own soft drink, rather than having an employee who's working the soda machine. So you can do it in ways that don't involve technology.

MARTIN: What about that?

PARKER: Well, actually, we do hand cups over to our customers, so that they can select their own soda. The people that we have at the front counter are busy tending to customers, making sure that they get the order right. They're making shakes. That's a hand wrought function of our company. And they're communicating with the line. So we just feel that's very, very important. You know, we do have computers, but there still has to be some level of communication and that back checking to make sure that things are accurate because as much technology as we like to think we can bake into our company, we still have the human element.

And furthermore, being in the service industry, it's all about the customer experience. And I don't think I've ever had a good experience in front of a vending machine. And there've been many parodies on that. So it all boils down to the human element, and we're just trying to work smarter and, again, be right in front of the face of our customers.

MARTIN: I'm also very curious to hear how your fellow business people, who are in your industry, are reacting to your decision?

PARKER: I'd like to hear that, too. I would be very interested. But I carefully kind of peruse social media on our website and our Facebook and Twitter. And you're right, there's a lot of controversy. Some people think it's the best thing - we're genius. Other people think we're, you know, the pariah because, you know, we're paying people too much money because they're, quote-unquote, burger flippers. And, you know, I don't really take offense to that because if somebody thinks that somebody working for us is just a burger flipper, they just don't know, inherently, what we're doing and what we're trying to achieve.

These people come from different backgrounds. We have people from different ethnicities, we have people from different religious backgrounds working with us. And they are way beyond burger flipping. They have restaurant experience, some in the quick serve industry, some in fine dining. We work for two reasons. We work for recognition and we work to be paid. And I think those go hand-in-hand and they can. They can live harmoniously together if we just recognize what the skill set and talent is of our teams.

MARTIN: Are you getting paid yet? Have you taken a salary yet, you and your partner?

PARKER: Very little. But that's coming.

MARTIN: Is it going to be $15 an hour?

PARKER: Hopefully by October 1.

MARTIN: So your employees are making more than you are at the moment.

PARKER: At the moment, they are. But...

MARTIN: Not unusual in a startup.

PARKER: No. No. And we want to show them that that's how much we care.

MARTIN: Marilyn, final thought from you. You were saying that this whole debate about the minimum wage is actually as intense as it's ever been, you know...

GEEWAX: Yes.

MARTIN: ...surprisingly, for something that's been around for 75 years, just - can you just briefly tell us where is the debate going?

GEEWAX: Well, you know, one thing is Senator Ted Kennedy used to be the person in Congress who really pushed to raise the wage. And without him as a champion right now, Congress seems to be unable to move forward with this. Nothing much is happening, even though the president has asked for it. A lot of people want it. It's popular with voters, but it just doesn't seem to be able to get any traction right now in this particular Congress. So as far as where it goes in the future, it seems like more and more the debate is shifting to the state and local levels so we're seeing a lot of cities and a lot of states pushing because the changes are not coming from the federal government. So I think that's where most of the battle will be in the future.

MARTIN: Marilyn Geewax is a senior business editor at NPR. She was kind enough to join us once again in our Washington, D.C. studios. With us from member station WDET in Detroit. Brian Parker, he's co-owner of Moo Cluck Moo, which is in Dearborn Heights, Michigan. Thank you both so much for speaking with us.

GEEWAX: Great to join you.

PARKER: Thank you very much. Transcript provided by NPR, Copyright NPR.