When Donald Trump announced his choice of Andy Puzder to serve as Secretary of Labor, the predictable response from the left and its media megaphones was that Puzder is “anti-worker” because he has never had much use for unions, and because he doesn’t believe the federal government should be setting the cost of labor artificially high.
That’s not just a philosophical or ideological position. Puzder serves as CEO of CKE Corporation, which is the parent company of Hardee’s and Carl’s Jr. His duty as CEO is to run the business profitably, much as it was my job as CEO of Godfather’s Pizza to do the same.
When you run a business that relies on largely unskilled labor, you have a tricky balancing act. On the one hand, good customer service is absolutely essential. There are a lot of choices out there for customers who want tasty, convenient and inexpensive food. If you serve them poorly, they’re not going to choose you. So you can’t afford to keep bad employees. Even if they worked for free, they would cost you money by alienating your customers.
On the other end, you have to recognize that unskilled workers can only deliver so much value to a business. That’s not their fault. It’s just the nature of the job they’re being asked to do, and of their relative skill level. A 17-year-old asked to work the counter can probably learn to take orders reasonably well, if only because that’s not a very difficult thing to do. He should be paid fairly for doing a good job, but the $15 an hour that liberal activists want for this type of work cannot possibly be recouped by the business in the form of any value generated by the employee.
That’s because he has only so much skill, and the job itself is not that difficult to do. You’d rather use a human than a machine because humans can be more easily redirected and deployed with more versatility. But if you’re forced to pay the human more than the human is worth, you’re better off going with the machine.
Hardee’s and Carl’s Jr. have been very successful, in part because Andy Puzder has understood how to walk the line between paying people too little – and suffering from poor performance and poor service as a result – and paying too much, thus hurting the business’s bottom line.
He has also understood that workers who want to earn more can do so by demonstrating their readiness to take on greater responsibility, thus delivering more value back to the business. If you can do something that will help increase my hourly intake by $30 or $40, then of course I’ll pay you $15 an hour. You’d be worth it. There are only so many positions at a company like CKE or Godfather’s that can represent that type of value, but there are some. It’s in the interest of the business, as well as the interested employee, to make such opportunities for advancement available.
What is not in anyone’s interest, including the workers, is for politicians to step in and arbitrarily decide what the cost of labor should be. That’s because politicians take no concern for the value of labor in a given business. As a result, they price many workers out of the market entirely, because it makes no sense for a business to hire them at the wage politicians demand they be paid.
If you’re an inexperienced worker, or you have poor habits, or you have poor skills, the best thing for you is to get a job you can handle and use that opportunity to improve. You can’t expect to be paid much in the process because, frankly, you’re not worth that much. But you can change that by working hard and making yourself better.
A Puzder-led Labor Department will stop pressuring businesses to overvalue their labor, thus giving employers and employees the opportunity to arrive at wage levels that make sense for both parties. Having a man who understands these things atop the Labor Department – or for that matter, in the White House – represents a gigantic change in the power structure in Washington.
It is long overdue. And everyone, particularly workers, will be better off as a result.
