Frederica Freyberg:

On the other side of the table on the minimum wage issue, the Wisconsin Restaurant Association. The group just released a new study that shows a higher minimum wage will squeeze an already tight bottom line for restaurants and actually cost Wisconsin jobs, more than 16,000 of them. Pete Hanson is the VP of public affairs for the association. Thanks for joining us.

Pete Hanson:

Hi, thanks for inviting me.

Frederica Freyberg:

So you don’t buy kind of the argument that raising the minimum wage will actually inject spending into the economy and then bring business into restaurants and make everything better.

Pete Hanson:

Well, there’s a longstanding debate on, you know, among economists. But I do think that the bulk of economic studies, in fact about 85% of credible, empirical studies say that raising the minimum wage will cost jobs.

Frederica Freyberg:

Because what are your members in the restaurant association saying about the prospect of having to pay employees more?

Pete Hanson:

I do advocate for restaurant operators, and they tell me that they want to give their employees raises. To run a successful restaurant you have to treat your employees well. You need happy employees. And when they can raise prices in order to afford to pay higher wages, they’ll do it. They don’t feel like that’s possible right now. They feel like if the minimum wage is raised, then those entry level employees who are at minimum wage, not as many of them are going to have jobs because they’re going to have to either reduce hours or cut jobs.

Frederica Freyberg:

And so because the economy is kind of where it’s at now, restaurants don’t feel as though they can just tick up those prices on the menu?

Pete Hanson:

The economy’s growing very slowly, and customers are still very price sensitive. So if the government tells restaurant owners and other business owners, who have entry level employees working for minimum wage, if the government tells them they have to raise what they’re paying, they have to pay for it somehow, and that either means through price increases, if their customers will pay them, or by reducing hours or jobs on the other side.

Frederica Freyberg:

Now, one thing people talk about, too, is having a higher minimum wage would reduce turnover among employees. Is turnover a big deal in the restaurant biz?

Pete Hanson:

There is a lot of turnover. Restaurant employees tend to be younger employees. They tend to be people just starting out in their professional lives. And, frankly, we feel that a job in a restaurant at an entry level is the first step towards a good job. A minimum wage– I’m sorry, towards a good job and a middle class future.

Frederica Freyberg:

Now, I know that some other states have raised the minimum wage. Is there information coming your way about what the effect has been on restaurant businesses in those states?

Pete Hanson:

I don’t think I can answer that, but I can tell you that there are 22 other states that have a minimum wage that’s higher than Wisconsin’s and higher than the federal minimum wage.

Frederica Freyberg:

What’s your reaction to what we understand to be kind of the politics of this effort; namely, you know, the referendums across the state with the minimum wage question on the ballot as a way to drive turnout on a bread and butter kind of issue like this for the November ballot?

Pete Hanson:

Well, the referendums are interesting indeed. In Dane County and Milwaukee County, those are advisory referendums asking voters if they would like the county to raise the minimum wage. Interestingly enough, counties and other local governments in Wisconsin don’t have the authority to raise the minimum wage. So it’s interesting that they’re asking the voters that question.

Frederica Freyberg:

So it’s advisory. And so what do you make of that, that it’s kind of this advisory referendum put onto the ballot in November?

Pete Hanson:

Well, I think those counties can pass a resolution and send that resolution to the state legislature, and so that would be saying, you know, Milwaukee County or Dane County feels that the minimum wage should be increased.

Frederica Freyberg:

All right. We leave it there. Thanks very much.

Pete Hanson:

Thank you.