This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Minimum Wage Hike Could Derail Young Workers

Stocks in this article: GPS WMT PBPB

NEW YORK (TheStreet) - The minimum wage debate is heating up again, and Jersey Mike's Subs, a growing sandwich chain, is weighing in.

Jersey Mike's founder and CEO Peter Cancro told TheStreet in an interview on Wednesday that while the company has always paid its employees higher than the current federal minimum wage, raising the wage too high may box out younger workers looking for jobs.

"We have always been at the forefront of that with always paying people more," Cancro told TheStreet. "We have maybe 12-15 people employed in every location and it's always been a place to work at. We've always offered a higher than minimum wage."

However if Obama's proposal to raise the minimum wage to $10.10 an hour were to pass, "it makes it difficult though for the 14- to 18-year-old," he added, referring to the fact that employers may opt to hire older, more experienced workers at that wage, leaving less jobs available for the younger age group, who are typically looking for their first job.

The President announced the intention to raise the minimum wage during his State of the Union Address in January.

"If they raise it too high then they are kind of excluded from jobs so you'd hate to see that. Maybe have a different offering for the 14- to 15-year-old kids," Cancro said.

The White House early last year endorsed a minimum wage increase to $9 an hour, but increased its aspirations in 2014 to push for a $10.10 minimum. The move comes as the President and Democrats attempt to use the discussion as a wedge issue to help defeat Republicans in this year's midterm elections.

The Congressional Budget Office released a report on Tuesday that said the $10.10 minimum wage policy would cut about 500,000 jobs from U.S. employment. The report said the same scenario would boost the income of families living below the poverty line by $5.89 billion.

Yesterday, Gap (GPS) made news by saying it would raise the minimum hourly rate for its U.S. employees to $9 in 2014 and $10 in 2015. The pay increase will be effective across its six brands, including flagship stores, Banana Republic, Old Navy, Athleta, Intermix and Piperlime, which encompasses roughly 65,000 store employees, Gap CEO Glenn Murphy said in an internal company call on Wednesday.

The wage increase falls in line with the company's desire to "do more than sell clothes," it said.

The decision earned Gap praise from President Obama.

Wal-Mart (WMT) is considering supporting a raise in the federal minimum wage. The Bentonville, Ark.-based retailing giant is weighing the impact of additional payroll costs against attracting more consumer dollars to it stores, a spokesman for Wal-Mart told Bloomberg. --Written by Laurie Kulikowski in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs