Rush to Reason, Tony Gagliardi & Susan Kochevar, March 23, 2015

Station:   KLZ, 560 AM

Show:      Rush to Reason

Guests:    Gagliardi, Kochevar


Date:       March 23, 2015


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HOST JOHN RUSH:  Because right now, we’re going to talk to Tony Gagliardi and Susan Kochevar, who have now joined us.  And are you both down at the capitol as we speak?


RUSH:  Oh, you’re home.  And Tony, you are, though, right?


RUSH:  Okay. So, fill us in on what is happening at the capitol.  I know, Tony that we’ve got a big deal going on. In fact, I want to spend a little time talking about this today, because it’s always a hot topic on “Rush to Reason”, which is the potential minimum wage bill.

GAGLIARDI:Yeah, we have in fact two bills going on as we speak, right now.  We’ve got House Bill 1300 which is sponsored by Representatives Melton and Moreno.

RUSH:  Okay

GAGLIARDI:  And, then we have the House Concurrent Resolution, also sponsored by Representatives Melton and Moreno.

RUSH:  Okay and what is each one of those?

GAGLIARDI: Well, 1300, what it does is it lifts the prohibition on local governments establishing their own minimum wage.  And then the House Concurrent Resolution would take a ballot initiative to the voters to raise the minimum wage incrementally beginning in 2017.

RUSH:  And it goes all the way to $12.50 by 2020.  Am I correct on that?

GAGLIARDI:  Right. Right.

RUSH:  Okay. So, let’s dissect that one first. Let’s talk about the minimum wage increase, and Susan, feel free to chime in anytime you feel like you need to, because this has a huge effect on businesses like yours and mine, although most of my people make more than the minimum wage.  But regardless, these minimum wage increases still affect everybody’s business, whether you have minimum wage workers or not.  Correct?

GAGLIARDI:  Yes, correct.

RUSH:  So, let’s explain that for just a minute.  And either Tony, you or Susan –either one, I don’t care which one of you or both of you, can talk about this. Tony, you talk to a ton of small businesses, and I am guessing that the majority—now, I don’t want to speak for you—but I’m guessing that the majority of them do not like this particular bill.

GAGLIARDI:  Uh, correct.  NFIB’s position at a national and state level, is NFIB opposes any effort to increase the state or federal minimum wage.  We believe that raising the minimum wage disproportionately hurts those that you are trying to help. It directly impacts the operating costs, and I think Susan is the best one to speak to that. It increases obstacles to hiring. And the minute you raise the minimum wage, you actually push those who you are trying to help out of the job market.

RUSH:  That’s exactly – that’s a great way to put it.  Susan, I know you specifically hire some folks in that– you know, in that bracket, because of the ages of some of the folks you hire to help with the drive-in during the summer months and so on.  Would that have an adverse effect on your business?

KOCHEVAR:  Well, it would.  And as I understand this particular bill, municipalities would have control over minimum wage.  So, if, you know, my municipality set a minimum wage at a certain higher rate, then – and I had to raise my prices – then people are going out of my community to go to theaters rather than coming to mine. Um, you know, there is sort an– something called elasticity in that sort of a mandated minimum wage, which means that if – is there’s a mandated minimum wage and prices go up, if it’s something like gas prices, people holler, because everybody has to pay those.  But if it’s something that’s in the entertainment business, for example, that really hurts us if our prices go up, because that’s something that people can do without.  They can stay home and watch TV.   So, those kind of mandates really hurt small businesses.

RUSH:  Yeah, so, Tony, explain – you know, we talk on Rush to Reason, this is a topic that we get into a lot. Just probably because of, you know, my business background, where I come from, and all of that sort of stuff.  We’ve got some that, you know, even listening right now, that would tell both you and I that that we should have minimum wage at fifteen bucks an hour, not just $12.50.  So, why don’t we move towards that?

GAGLIARDI:  Well, and that’s what part of my testimony this afternoon was about.  Many in that room advocating for an increase in minimum wage and, uh, the majority of the members of the House State Affairs committee believe that raising the minimum wage is a moral issue; that we need to help the poor.  And my response to that is that raising the minimum wage is nothing but a blunt tool that is not effective alleviating poverty.  Never has been, and never will be.

RUSH:  No.  If that were the case, — my wife brought this up yesterday, Tony, when we were kind of listening to this and we kind of heard what was going on.  I was kind of listening out of the corner of my ear, the I really tuned in when I heard something, you know, pop up or I read it – I can’t remember exactly what we were doing.  But, we both started talking about it.  […]  [citing prices from his young adulthood for gas and food].  So, if minimum wage went to fifteen bucks an hour, everything increases.  And the reason I say that is because, you know, minimum wage today is, depending upon what part of the country you’re in, anywhere from – what, guys?— seven to nine bucks an hour. Am I saying that roughly correctly?



RUSH:  So, seven to nine bucks an hour but yet, what does it cost now for a movie ticket versus what it used to cost when I was at minimum wage at $2.65 an hour? It’s a lot more than it was then, correct guys?

GAGLIARDI:  Absolutely.


RUSH:  So, even though our wages since I started working clear back in, you know, — I think, full-time in about 1978-79, something like that full-time in the summer, so that’s when minimum wage was $2.60 an hour, we are now—let’s see, one, two, about four times higher than that, and yet I don’t see our poor has changed.


GAGLIARDI:  No, it hasn’t.  And that’s what I’m saying. And according to the Department of Labor, and the Bureau of Labor Statistics, half of the wage earners under 26 years old, um,– and they’re not the primary source of family income.  The minimum wage is designed and always has been, to be an entry level starting wage – a training wage.  And statistics show that after the first year, 95% of them are earning above the minimum wage.

RUSH:  If they work, learn, and apply themselves.

GAGLIARDI:  Work, learn, and apply – absolutely.

RUSH:  Those are kind of the three things that I look at, because to your point, you know, Tony and Susan, you’ve said this many times on our program, minimum wage is not a career, is it?



RUSH:  Never has been.  Never will be.


KOCHEVAR:  No, you gain skills and establish your credibility in terms of coming in on time —

GAGLIARDI:  Right, and what –.

KOCHEVAR: –and that sort of thing.  You know, if we raise minimum wage, there’s one other thing to think about, here.  Say I have a manager who’s making twelve dollars an hour or somebody that’s a little higher, been working for me longer, and I have to raise the minimum wage to twelve dollars, then I have to give that other person a raise.


RUSH:  Yep, that’s right.

KOCHEVAR:  They’re not going to work for that!  So—

RUSH:  That’s right.  It’s a snowball effect.

GAGLIARDI:  That’s absolutely right

KOCHEVAR:  It’s a buoy in the water.

GAGLIARDI:  That’s absolutely correct.

RUSH:  That’s right.

KOCHEVAR:  If you raise the minimum wage, all the other prices go up also.

RUSH:  That’s right. That’s exactly–.