BHO’s minimum wage increase harms, not helps, workers
The Military Times reports on a damaging repercussion of the mandated increase in the minimum wage for companies with federal contracts.
When Obama signed the executive order unilaterally hiking the minimum wage, employees of such companies —- workers at traditionally entry level jobs —- were jubilant. But that cheer will be short-lived for those who find themselves unemployed. The hourly pay increase to $10.10 from $7.25, is causing many fast food concessions on military bases to request release from their contracts
The new rules must be part of any contract we negotiate,” said Kathleen Martin, a Navy Exchange Service Command (NESCOM) spokeswoman. Many vendor partners have verbally indicated hesitation to accept contract changes reflecting the revised wage rules.
“At the end of the day, there will be fewer jobs,” said an industry source. “And for [the contractors] who stick it out, there will be higher costs and the customers will pay more.”
Labor Department rules issued last fall for fast food workers on federal contracts under the Service Contract Act require an increase in the minimum wage. The rules also require payment of new, additional “health and welfare” benefits at a rate of $3.81 per hour to those employees.
Four restaurants chains, including McDonald’s outlets, are slated for closure on Navy installations, according to NESCOM officials. Two other contractors —- a name-brand sandwich eatery and a name-brand pizza parlor —- have asked to be released from their Army and Air Force Exchange Service contracts to operate fast food restaurants at two other installations, according to AAFES
These closings “are the tip of the iceberg,” the source said. “I don’t think anybody has realized what the far-reaching effects of this will be.”
At the time of Obama’s signing of this executive order, critics of the mandate correctly charged that raising the minimum wage would have an adverse effect, discouraging businesses from hiring more workers at a time when job growth is sorely needed. It would also negatively impact young workers who typically take these entry level jobs.
Just 54 percent of Americans ages 18 to 24 are currently employed, according to a Pew Research Center study. That’s the lowest employment rate for this age group since the government began keeping track in 1948. One in four 18 to 34 year olds have moved back in with their parents after living on their own.
Yet in 2012, Obama irrationally carried the youth vote nationally by 60 percent. This liberal demographic clearly is not paying attention.