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Joe Rogers III, CEO of Waffle House, recently announced a long-awaited pay rise for his workers.
After months of labor disputes, Waffle House employees will see their base pay rise to a minimum of $3 in June, and within two years to a minimum of $5.25.
However, he added a rather substantial caveat in a video message announcing the wage hikes—higher pay, says Rogers, means higher prices at stores across the US.
“We need to increase menu prices to pay for this journey, and we have more ability to do that in some places and less ability in others,” he said.
It’s a slightly sour note that will, inevitably, leave some customers frustrated with Waffle House employees represented by the Union for Southern Service Workers (USSW).
Throughout a year-long dispute with Waffle House, unionized workers have held strikes to demand better pay and working conditions.
Rogers’ message appears to show the company, now meeting these demands, is choosing to pass the higher costs onto the customer - despite making an estimated $1billion in annual revenue.
Waffle House is a privately owned business and Rogers is, of course, perfectly at liberty to increase prices to cover the cost of higher pay. But is it right that he is laying the blame at the feet of workers who have simply battled for fair compensation?
Wage hikes: What’s the cost and who’s to blame?
Waffle House isn’t alone in this conundrum. Fast food employers in California, for example, were faced with a mandatory minimum wage hike from $16 per hour to $20 per hour in April.
For many employees feeling the squeeze of the cost of living crisis, this was a much-needed relief. “I definitely think it’s a very big deal,” a McDonald’s cashier, Jaylene Loubet, told CNN at the time. “What we’re fighting for is not unreasonable. We’re just asking for what’s fair.”
But few employers shared the same sentiment. Many have already taken steps to combat the elevated minimum wage with price hikes, reduced hours, and layoffs. Alex Johnson, a franchise owner of ten Auntie Anne’s Pretzels and Cinnabon restaurants, said he planned to raise prices by around 5% to 15% in the stores.
“I try to do right by my employees,” Johnson said. “I pay them as much as I can. But this law is really hitting our operations hard.”
Particularly for smaller employers who are more susceptible to escalating costs, there are few easy answers. Something’s got to give when financial performance goals must be met, employees must earn a fair crust, and prices must be fair for customers. However, this doesn’t mean there’s an excuse for employers to blame price rises on wage increases.
Tensions between workers and customers
In the case of Rogers and Waffle House, it could simply be a communication issue. Rogers is free to raise prices if he believes this will protect his profit margins, but perhaps he should explain this rather than putting it solely on his employees.
‘We’re increasing prices because our wage costs have risen…and we don’t want to sacrifice our profit.” It is this final line of reasoning that is frequently missing from employers who announce price increases off the back of pay rises.
Apart from anything else, it’s unlikely Waffle House workers will look kindly upon being blamed for price hikes by their own CEO.
Moreover, putting accountability at the feet of workers only drives the tensions between fast-food customers and staff.
Take California’s minimum wage law. It’s undoubtedly a highly charged issue. Customers have vented online about the spiraling cost of their McDonald’s, for example, due to the legislation.
And given the sheer volume of workplace violence against fast food workers – including due to extra costs – employers can ill afford to add fuel to the fire.
Sometimes, price hikes are inevitable when wages are increased. But blaming workers is frustrating, unfair, and irresponsible.
