Why CKE's Andy Puzder Thinks the Government Doesn't Understand Job Creation
CEO Andy Puzder is greeted by a RFDC attendee after his talk.
By the time CKE’s CEO Andy Puzder was introduced on the second day of the Restaurant Finance & Development Conference in Las Vegas, no introduction was needed.
Hugh Hewitt, a radio commentator and political analyst on NBC who kicked off the conference on November 14 with an analysis of the presidential election with Democratic pundit Juan Williams, was already campaigning to make Puzder the next Secretary of Labor.
“Andy is the apostle of what you do,” Hewitt told the audience of restaurant operators and finance execs. With Puzder as Secretary of Labor, “the economy will take off,” he promised the crowd. All they had to do was tell their representatives to talk to Trump's transition team about selecting him for the job.
If Puzder’s speech on the economy sounded a bit like a campaign speech, it’s because for the last few months he’s been speaking as a surrogate on the economy for President-elect Donald Trump.
A former trial lawyer, Puzder is used to evangelizing for the restaurant community. He took over CKE, parent company of Hardee’s and Carl’s Jr., in 1997, where he’s credited with Hardee’s turnaround. A frequent guest on radio and TV business shows long before the last election cycle, Puzder is the coauthor of “Job Creation: How It Really Works and Why Government Doesn’t Understand It.”
Government overregulation has had severe consequences for economic growth, job creation, dignity and self-respect, he said. “And restaurants may be the canary in the coal mine,” he added, referring to the sacrificial canaries used to test whether the levels of carbon monoxide in mines would kill miners.
Government, he contended, needs to get out of the way of entrepreneurs and allow economic growth to happen without the restrictions of Obamacare and mandating minimum wages and overtime, among other things. “If employers are competing for the best employees, they will pay more,” he said. “You can’t order businesses to be profitable, or place restrictions on them and expect them to grow.”
Hobbled by today’s government regulations, Puzder commented, he’s not sure he’d have the same success turning Hardee’s around.
There are a number of factors working against the restaurant industry, he said. Restaurants are labor-intensive, and therefore, while other industries such as grocery stores are benefiting from lower food costs, restaurant margins tend not to improve because of the extra cost of employees. Government regulations punish businesses that hire the most workers, and reward the ones who hire the least, he added. The result of higher labor costs is fewer jobs, he pointed out.
Surveyed consumers say they aren’t eating out as often as they’d like, he said. One explanation may be the increases in healthcare costs. The 2% increase in 2015, followed by 6% the next year hit consumers hard, but will pale in comparison to the 25% increase expected for 2017, Puzder said.
“A decline in food prices should put more money in their pockets to go out to restaurants more," he said, "but only if they can retain the extra cash after they pay their other expenses."
Lower taxes will also put more money in people’s pockets, he said, another campaign promise made by Trump.
Becoming less dependent on foreign oil and revamping our energy policy is also needed. “We need to stop sending money to countries that support radical Islam,” he said to applause from the audience.
Deregulation is an action he sees much more likely now with Trump headed to the White House. “More government is not the solution to every problem, it’s the problem to every solution,” he said.
“Ironically, they (government) punish us for being in business to make a profit.”
Editor’s note: Watch for a future blog on our one-on-one interview with Andy Puzder