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Minimum Wage and Joint Employer Issues Won't Go Away

by Ed Teixeira

Proponents and opponents of minimum wage increases won't stop fighting and the main defendants of the status quo are franchisors.

From Seattle to New York to Washington D.C. the battles continue over attempts to increase the minimum wage as well as the recent decision by the NLRB defining McDonald's as a joint employer with their franchisees. Supported and fueled by organized labor and especially the Service Employer's International Union (SEIU), the battle lines have been drawn between the Obama administration and various state political leaders and the International Franchise Association, National Restaurant Association and the U.S. Chamber of Commerce along with other pro-business groups. In the U.S. Congress, a bill to reverse the recent NLRB Joint Employer decision has been introduced and has a reasonable chance of passage.

The outcome of these battles could have significant implications for the franchise industry as well as independently owned small and medium sized businesses. In a recent article in the Wall Street Journal, "Weekend Interview" feature, economist Thomas Sowell , offers his opinion on why an increase to the minimum wage hurts young unskilled minority workers citing the fact that prior to a minimum wage the unemployment rate for unskilled minorities was in single digits.

 On the flip side New York Governor Mario Cuomo stated: "It's wrong to have any economy where the rich get richer and the poor get poorer, where the American dream of mobility and opportunity has become more of a cruel myth," Mr. Cuomo said in front of a cheering crowd of labor union members. "15 dollars an hour will be the highest statewide rate in the nation and will herald a new economic contract with America and it's about time."

In my September 14 Newsletter, I get into more detail regarding these important issues and the latest developments. The important point is that both sides continue to dig in their heels and push to advocate their respective positions. The future will hold the answer to how these issues will play out.

2015 FranchiseKnowHow, LLC

Ed Teixeira is the President of FranchiseKnowHow.com and Chief Operating Officer, FranchiseGrade.com. He is a former franchise executive and franchisee. He can be contacted at 631-246-5782 or at  franchiseknowhow@gmail.com


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