Leo Hindery, who runs the private equity firm Intermedia Partners, is blunt in his criticism of two corporations – McDonald’s and Walmart – that are leading the effort to block an increase in the federal minimum wage to $10.10 an hour.
It is these two firms, he said, that represent the two industries – fast-food restaurant chains and low-cost retailers – that have been among the main obstacles to getting minimum-wage-increase legislation through Congress. Both Walmart and McDonald’s have maximized their profits by keeping salaries of their rank-and-file workers at or close to the minimum wage.
“If I were the CEO of McDonald’s I would be embarrassed,” he said today while sitting in a restaurant at the Dirksen Senate Office Building. “I would be so embarrassed I would try to rectify this inequity.”
Hindery was on Capitol Hill today with more than 20 other business leaders who call themselves Smart Capitalists to lobby for legislation that would increase the minimum wage. Their pitch to lawmakers was that a higher minimum wage would help boost the overall economy. A Senate vote on a minimum wage increase could come as early as next week.
Hindery says in the interview that with income inequality at levels not seen since the late 1920s, raising the minimum wage is “an ethical issue” and a way to begin to address that imbalance.
“A number of us who are in business are here today trying to convince Congress that the very best thing for the United States is a vibrant middle class that grows from the bottom up. And I emphasize the phrase ‘from the bottom up,’” Hindery explains. Otherwise, “we will never ever, ever have a balanced economy in the United States.”
He says that it is “criminal” that there is such a wide gap between the $7.25 to $9 an hour Walmart and (corporate sibling Sam’s Club) pays its associates, depending on location, and the starting salary associates earn at Costco, which is $12 an hour.
As for McDonald’s, Hindery points out that many of its workers end up on varying forms of public assistance because of its low salaries. “McDonald’s is a billion-and-a-half dollars more profitable because it lives off the back of its low-wage workers and lives off the subsidies that come to it indirectly from the states,” he says.
“No company should be profitable based on the inequitable treatment of its employees – no company. So if I were that CEO I would take my embarrassment and I would either fix McDonald’s right away or I would stop being its CEO, because I couldn’t possibly live in that environment any longer.”
Companies like McDonald’s would not be harmed, Hindery says, if they raised their wages. “I am still going to buy that burger at McDonald’s if that’s what I’ve been doing,” he says. “I will just pay an honest price for it as a consumer. But I will know when I go to bed at night that the young woman or young man who served it to me, or the older man or older woman who sold it to me, might have a more comfortable, more appropriate lifestyle.”
The current minimum wage “is so far below what a woman or man needs to survive in this economy that anybody who pays their workers that level and sticks with it should truly be embarrassed.”
Members of the Smart Capitalists for American Prosperity include former publisher of The American Conservative Republican Ron Unz; investor and former White House Chief of Staff Democrat Erskine Bowles; venture capitalist and Managing Director of Greycroft LLC Alan Patricof; real estate mogul Jeff Gural; venture capitalist and co-founder of Alta Partners Garrett Gruener; co-founders of Ben & Jerry’s Ice Cream Ben Cohen and Jerry Greenfield; investor Peter Stamos; TV Host Rick Steves; former investment banker and Harvard Business School professor Rob Kaplan, and Wall Street investors Daniel Berger and Lawrence Benenson.
Also involved in the lobbying effort is Business for a Fair Minimum Wage, a national network of business owners and executives that includes Costco, Eileen Fisher, Ben & Jerry’s, Dansko footwear, New Belguim Brewing, Seventh Generation, Parnassus Investments, Organic Valley, Zingerman’s, American Sustainable Business Council, Greater New York Chamber of Commerce, Main Street Alliance, ABC Home, National Latino Farmers and Ranchers Trade Association, Uncommon Goods, Equal Exchange and American Income Life.
We need more than 24,000 signatures to meet our goal on our petition calling on Congress to raise the minimum wage. To show your support for raising the minimum wage to $10.10 an hour, sign the petition.