The chief of Dunkin’ Brands condemned a New York wage board’s recommendation to increase the state minimum wage for fast-food workers to $15 an hour, saying that the pay boost and lack of input from the industry were “absolutely outrageous.”
Nigel Travis, the Dunkin’ CEO, commented on the wage increase during an interview with CNN Thursday.
A board appointed by New York Governor Andrew Cuomo on Wednesday recommended that the state increase minimum wage from $8.75 to $15 in stages, beginning with an initial hike before the end of the year and concluding in the summer of 2021. The wage in New York City would increase more rapidly to $15 by the end of 2018.
In the interview, Travis said Dunkin’ supports “reasonable increases in the minimum wage” and believes pay hikes will stimulate the economy. But he argued that the current proposal represents a 71 percent wage increase that would hurt small businesses, Dunkin’ franchisees, and young workers.
“Obviously, we’re going to do everything we can to mitigate, and part of the mitigation is employing less people,” Travis said. “I don’t think it’s going to mean layoffs. I think there will be less hiring, less growth.”
Travis further explained his comments in a statement Friday.
“To be clear, our concern with the increase to the minimum wage in New York is that it unfairly targets the fast-food industry and was achieved without the involvement of the state Legislature,” Travis said.
“A 71 percent increase over the next three years in New York City is too large an increase over too short a period for our franchisees, who are small-business people.”
Travis said Dunkin’ will work with its franchisees to find ways to offset the “sudden increase,” but said it’s too early to get into specifics about the impact on the business.
Dunkin’ paid Travis $10.2 million in total compensation in 2014 — more than double his payout from the previous year.
The company reported second-quarter revenue on Thursday of $211.4 million, up 10.7 percent from the same three-month period in 2014.
Sales at Dunkin’ Donuts restaurants in the United States grew nearly 10 percent to $149.8 million.