Denny's shareholders,
the restaurant, Denny's, they're
parting ways with the CEO and
the National Restaurant Association
calling for the group to stop all
of its lobbying efforts against
legislation to raise the minimum
wage to a living wage.
Quote, they said, Denny's
shareholders are demanding that the
restaurant chain end its membership
in the National Restaurant
Association, halt all lobbying
efforts against legislation to
eliminate a sub-minimum wage for
tipped workers, and
start paying all of its workers at
least a full minimum wage.
Now for context, sub-minimum
wage is what restaurants have
been able to get away with paying
their tipped employees.
For comparison, the federal minimum
wage right now 7.25 but
the amount that the tip workers
are getting from their employees is
about 2.13 an hour.
And if you take into consideration
if a worker doesn't get tipped, or
doesn't tipped well in an entire
day at Denny's,
at the end of their shift they
would not even be able to afford
most meals on Denny's menu.
The letter that was sent by
shareholders to the CEO came after
Denny's Chief Financial Officer,
Robert Verostek,
stated on an earnings call with
investors that the gradual increase
in the minimum wage,
not only didn't hurt the company,
it appeared to help the company.
He said quote, as they've increased
their minimum wage kind of
in a tempered pace over that time
frame, if you look at that
time frame from us, California has
outperformed the system.
Over that time frame they had six
consecutive years of positive guest
traffic, not just positive sales,
but positive guest traffic as
the minimum wage was going up.
So in other words, happy workers,
happy customers.
Or maybe this means that some
of Denny's employees themselves
could actually afford eating at
the restaurant at the end of
their shift.
But this is an interesting spin,
Cenk, on the classic feud between
capitalists and labor,
capital and labor.
While the CEO of the company Is
aligning with the National
Restaurant Association and arguing
in a letter to congressional
leaders that the following quote,
the Federal raise, the Wage Act,
which would raise the national
minimum wage to 15 an hour by 2025
and eliminate the sub-minimum wage
for tipped workers is the wrong
bill at the wrong time for
our nation's restaurants.
While that was going on the CFO and
shareholders of Denny's are arguing
in favor of increases
to the minimum wage.
They said the following quote,
suggesting that a higher minimum
wage encourages increased consumer
spending.
The letter also noted that during
the pandemic, the five states with
the greatest amount of restaurant
closures all allowed a sub-minimum
wage for tipped workers.
Now I want to pull a graphic on
the screen that just kind of gives
you an idea of what the value menu,
the quote unquote value menu is
at Denny's,
compared to the 2.13 an hour.
Because as you look at it,
you realize that after a full day
shift, if these tipped workers
are not tipped properly by
the consumer, which the restaurant
owners are shifting the burden
obviously to the consumer instead
of them being responsible for
paying a living wage.
Then at the end of the day,
there's a lot of those workers who
could not even eat at Denny's.
And so it just makes sense that if
you have employees that
are satisfied, that can actually
live, they provide better service.
And so we see a split between
the CFO and the CEO on this, but
at the end of the day we understand
that the simple truth is this,
if you pay your workers, you can
have a better performing company,
and this is exactly what Denny's is
finding out.
I'm curious to hear what you
all think.
>> Yeah, well, let me start by
saying two quick things here.
There's two issues here, one is
a shareholder revolt, and the other
is the actual $15 minimum wage and
what is considered the Ford Model.
Henry Ford had a lot of issues, but
he did do one good thing, he said,
we should pay our workers enough so
they could afford our cars.
And that did prove to be
a brilliant model, and in
this case, Denny's should pay their
workers enough that they could also
have a moon over Miami, and [LAUGH]
which by the way is my favorite.
[LAUGH] >> But
the shareholder revolt at first
intrigued me greatly and I think
that that's an interesting model,
but it scared me in the beginning
because I knew the CFO.
We covered on the show before, CFO
had said no, the $15 minimum wage
actually helped our restaurants.
I was like, no, did they fire him?
because usually what happens is,
don't you ever tell anybody
the truth, we're going to
maximize profit no matter what.
And if you're out of line,
we'll fire you and
we'll find someone who will tell
lies instead of the truth, right?
In this case, no,
it was the good shareholders.
And I keep it real, look,
these are some groups that some of
them are activist groups for
their actual shareholders and
representing shareholders,
Inter-Faith Center on
Corporate Responsibility,
as you saw was a different group.
Robert F Kennedy Human Rights
Group, and
then Atacita Social Capital.
So and mixed in there are,
like I said, actual significant
shareholders saying let's do the
right thing because it's both the
moral thing to do and apparently
the profitable thing to do.
So which leads to the second point,
it wasn't just California,
California, Washington, Oregon,
Minnesota, wherever they're doing
higher minimum wage,
Denny's profits are not going down,
they're going up.
Even though their costs are higher
because of the wages, and
furthermore, you saw that graphic
that Ben read, you guys, about
where they had the most closures.
Where they have the lowest wages,
they have the worst results.
So, Charles there's some chance
that at some point these
restaurants, it won't mean that we
have less corporate control, but
these restaurants might realize
the Henry Ford Model and go, okay,
we'll voluntarily pay people more
because it turns out, my God,
everybody wins.
>> Well, Cenk,
you bring up a great point.
And one of the things that struck
me about this story was when
thinking about the CEO and his
position, I just kind of wondered,
well, what sort of argument is
it that you need?
Or are you just intent to be
Bob Cratchit, like stingy
Bob Cratchit forever and ever.
Because there's been evidence on
both sides in terms of data around
what it does for your employees,
what it does for your customers,
and what it does for
your bottom line.
So you would think,
ostensibly from every angle of how
something can be measured,
this can be seen as a positive.
And yet, and still,
you're standing with I don't
know what the justification is in
opposition to this for no reason.
In a lot of cases, you have
situations where people want to
argue about data or the usefulness
of it, or the utility of it.
But when you have a situation like
this when there's been evidence
that's been put in front of you,
that's data driven and that's going
to impact your bottom line,
pretty much from every angle,
including employee satisfaction,
and you stand in the way of that.
The question is, number one, why?
And number two, what is the most
persuasive argument for
you to actually listen to?
Because clearly you're not
concerned with the bottom line
because if you were, the data
speaks in the other direction.
Clearly you're not prioritizing
your employee or
your customer satisfaction,
because again, the data speaks in
the opposite direction.
So for me, my biggest question is,
what exactly are you looking for
in order to change or
at least reconsider your position?
>> I think one of the things
that we're fighting against
is just the the mass momentum of
this narrative that in order for
your profits increase, you have to
minimize the cost of labor.
Right, this is as old as capitalism
itself, this thought, and it's been
so ingrained across the globe,
but specifically here
in the United States.
And so I think what we're having to
fight back against is just an over
abundance of misinformation because
it's just clear this
economy would grow more if workers
were paid more.
I mean, there's just no question
about that.
And so instead of adopting the Ford
Model, right, instead of adopting
this sensible model, what they're
doing, they are opting on the side
of draining their employees for
everything they possibly can.
Paying as little as they possibly
can while charging the most they
possibly can.
Because if you think about it, one
of the number-one excuses you here
in the propaganda world is that if
we increase the minimum wage,
it's going to increase the price of
your hamburger.
But the price of hamburgers and
the price of all of this food has
gone up steadily over the years
while the wages clearly have not.
>> Yeah, so I want to build on what
you guys are saying.
First of all, overwhelming majority
of the American people want the $15
minimum wage.
So for the politicians,
now you've got some corporations at
least saying, Yeah, man,
I don't know why it's doing it, but
[LAUGH] we're more profitable if
you do this.
You've got a huge majorities of the
American people and overwhelming
majority of the Democratic Party,
and they control every part
of Congress and the government, and
they still haven't done it.
And it's not even close.
Eight Democrats voted with
the Republicans to say, hell no,
we will not raise the minimum wage,
and certainly not to $15 an hour.
And that's because of why, the
National Restaurant Association,
among other lobbies,
business lobbies like the Chamber
of Commerce, because they
have not come to the conclusion
that Denny's has come to.
And why?
So Charles asked a good question
about that,
because of short-sightedness.
So as Ben pointed out, look,
they look at it and they go, okay,
I'm going to increase my costs.
I don't know what's going to happen
with my revenue, so I don't want to
find out, I don't want to make
an investment in my employees.
I don't want to make an investment
in the community.
I don't want to make any of those
investments, I just want to keep
crushing my employees because I
know that it'll keep my costs down.
But now here's Denny saying, but
everywhere we have increased those
costs, we've increased our revenue
by even more, and hence our profits
by more, but still short sighted.
So what do they do instead of
spending the money on their
employees, they spend it
on lobbyists, and they spend it on
campaign contributions.
And I'll give Newsweek credit here
at the end of the article,
they mentioned something that
no mainstream media outlet ever
mentions.
They said after voting no
on this bill, Christine Sinema and
Joe Manchin, two corporate
Democrats then went to
the National Restaurant Association
and raised money, and told them,
yeah, we voted with you guys.
And basically, we did your bidding,
now pay up, and they did.
We have legalized bribery in the
country and that's what happens.
And there's overwhelming evidence
of this in every way you
can imagine.
And Ben is undoubtedly right based
on both common sense and
the weight of economic evidence.
Trickle down economics doesn't
work, it has never worked.
Bottom up economics creates
virtuous cycles in the velocity of
money and it does work, but it
doesn't just work for the minimum
wage workers, it puts pressure on
wages to go up for everyone.
But it doesn't just work for
the workers, it also works for
the companies.
That is why from 1938 to 1978,
when we had real representation and
we did not have legalized bribery,
we had the greatest and
we had taxes as high as 90%,
91% for the highest bracket.
We had the best performing economy
in the history of the world.
The evidence is in.
One last piece of evidence, Amazon,
they said, my God,
we can't do $15 minimum wage.
Remember Bernie Sanders and
Ro Khanna pressure them into
it ,and they said no, no,
no, it'll kill the company.
Hilarious, right?
It might for a small company,
maybe for a midsize company you
might have issues, with Amazon?
Well, the pressure worked, Amazon
moved to $15 minimum wage and
guess what happened?
They're still making
trillions of dollars, Jeff Bezos is
still the world's largest and
richest man there is.
And it didn't hurt their profits at
all.
So, guys, I think that there's only
one real impediment here and
that's the lobbyists, and
both the Republican and Democratic
politicians who are willing to
listen to them because of
the checks that they get.
>> Well, Cenk,
I think that's a really good point
because at the end of the day when
you boil it down to dollars and
cents, continuing to move in this
way doesn't really make sense.
It doesn't make common sense.
And so then the question does
become why, and you're right,
after you peel back those layers,
that's the only thing that's left.
And so I think it does raise
questions and it should raise
questions as to what type of
involvement the political system is
playing in terms of how this
conversation is being manipulated.
And who is playing the game around
how they're manipulating this
in favor of or against working
families in America?
And I think that that's a really
important point that people aren't
seeing at the broader end of this.
This is not ideological, right?
The data is very, very clear.
This is not a matter of, well,
the business needs to protect
itself and protect its profits.
Because if that were the case,
then as you've already said,
we know what direction this
conversation would be going in.
This is a matter of political
wrangling by insiders, by lobbyists
and so on and so forth.
And that is at the heart of why
this conversation and
the narrative continues to be
maneuvered and manipulated to keep
public sentiment not on the way or
on the side of the data, because
that's very, very clear in terms of
what conclusion we would all draw.
>> Yeah, I think it also speaks to
kind of in the general discourse
across the nation.
A lot of people kind of,
they resort to this simple logic of
the less I pay a person,
the more I can keep.
And that level of selfishness
that's kind of ingrained in
the American psyche also fuels this
from the bottom up.
And of course it is like
the National Restaurant Association
spending I think it was $2.6
million for lobbying in the last
year, some obscene amount of money
that they spent.
So it is coming from the top down,
but I also think in
the conversation, in the way that
these outlets, media outlets
are able to continue this,
basically at this point propaganda.
It's propaganda because it
goes against the data.
It's also because it plays on
the sentiment that's
in the minds of a lot of Americans.