Retail, Fast Food Industries Not Thrilled With Obama's Minimum Wage Push

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Obama minimum wage state of the unionPresident Obama's State of the Union proposal to raise the federal minimum wage to $9 an hour has the retail industry on edge and fast food stocks struggling.

During Tuesday's address to Congress, the president pointed out that a full-time worker on minimum wage makes just $14,500 a year. That places him or her below the poverty line for an adult supporting even one child.

"Tonight, let's declare that, in the wealthiest nation on Earth, no one who works full time should have to live in poverty -- and raise the federal minimum wage to $9 an hour," Obama said, adding that automatic increases to the minimum wage should be tied to the cost of living going forward.

The retail industry is not happy about that idea.

"A minimum wage hike right now would be one more factor driving up costs for employers and creating headwinds for job creation, especially among the small businesses that create most of our nation's new jobs," said David French, senior vice president for government affairs for the National Retail Federation.

The fast food industry would likewise be stung if the minimum wage rose from $7.25, where it has stood since 2009. And indeed, fast food stocks lagged a bit in today's trading. McDonald's (MCD), for instance, ended the day down 1.2 percent. Meanwhile, Yum Brands (YUM) dipped, recovered just after Taco Bell announced the new Cool Ranch Doritos Loco Taco, , then lost some ground again to close down 0.5 percent. Jack in the Box (JACK) also saw its share price decline about 1 percent Wednesday.

It's never clear how much the movements of stocks can be attributed specific causes such as the possibility of a minimum wage hike, and Business Insider points to a few other possible culprits for the fast food dip, including rising gas prices and weak casual dining same-store sales.

All the hand-wringing by retail executives and fast food shareholders might be moot, though, as opposition by congressional republicans is likely to be stiff. In a press conference following the State of the Union, Speaker of the House John Boehner (R-Ohio) expressed his opposition to raising the minimum wage.

"When you raise the price of employment, guess what happens?" said Boehner. "You get less of it."


Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.



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392 Comments

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Roberta

The natiom is wealthy but not necessarily the people in it,

February 16 2013 at 10:07 PM Report abuse rate up rate down Reply
obamaisafiasco

The Obamabot was busy copying and pasting his liberal drivel earlier today.

February 15 2013 at 7:09 PM Report abuse -3 rate up rate down Reply
obamaisafiasco

teapartyisstupid
Thanks greedy oil companies.

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Thank the greedy government!!

February 15 2013 at 7:08 PM Report abuse -2 rate up rate down Reply
obamaisafiasco

teapartyisstupid
you tell me evan.

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Posting questions to yourself again? LOL

February 15 2013 at 3:06 PM Report abuse -2 rate up rate down Reply
obamaisafiasco

teapartyisstupid
Why Inflation Hurts More Than It Did 30 Years Ago


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Because you haven't seen an increase in your welfare check?

February 15 2013 at 3:04 PM Report abuse -2 rate up rate down Reply
obamaisafiasco

teapartyisstupid
Less unions = more low paying jobs

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Less unions keep union thugs from stealing union dues out of working peoples pockets.

February 15 2013 at 3:03 PM Report abuse -2 rate up rate down Reply
stvhndyman

Doesn't anyone see the "loop hole"? The minimum wage hike is for FULL TIME employees! This means less full time workers and more part time workers. It's the same game with health benifits, vacation pay, etc.

February 15 2013 at 3:54 AM Report abuse +1 rate up rate down Reply
amanda.holliday

OMG if Obama would quit ******* everything up we would be ok. If he ups the federal minimum wage then rent is gonna go up, bills are gonna go up and everyone who worked hard are gonna have to work even harder and those who cant like me. I am a single mother and I am trying to find a job and support my daughter. I know there are several people like me who are trying so I am saying this in the nicest possible way. OBAMA LEAVE **** ALONE!!!!!!

February 15 2013 at 3:19 AM Report abuse rate up rate down Reply
thirdherdnerd

The first minimum wage I worked for was $1.00/hour and gas was about $.35/gallon so a gallon of gas was about 35% of an hours work. $7.25/hour now with gas at $3.50/gallon it is just under 49% of an hours work. At $10.50/hour, your equivalent to what a dollar was in 1960, a gallon of gas would be about 33% of an hours work. Assuming your COLA had been in effect a minimum wage worker in real terms got nothing. I believe minimum wage laws do very little to actually raise the living standard for those at the bottom rung of the working life ladder. Experienced workers in all areas make above minimum wage because of competition rather than some artificial minimum. Allow all under 21 to work for any wage they are willing to work for.

February 15 2013 at 1:24 AM Report abuse rate up rate down Reply
elisa030303

Personally, I won't be frequenting these retailers anymore. They won't get a cent out of me anymore.
The greed is disgusting, and so is the food they sell. Pass.

February 15 2013 at 1:01 AM Report abuse rate up rate down Reply