Everybody knows that raising the minimum wage in certain states will hit the fast-food industry hard. Customers will bear the brunt, punching orders into kiosks and paying higher prices. The first significant fallout will come from New York City, where the minimum wage will rise to $15 by 2018.
Some straight talk from White Castle VP Jamie Richardson, as quoted by the National Review: “Is there any room to raise prices to cover costs? We think we’d need to increase menu prices by something like 50%. It’s not something we’ve done before. It’d be catastrophic.”
Then there are the lost opportunities, particularly for teenagers. Mr. Richardson again: “Candidly, this could create a whole generation of kids who won’t get their first job. We’re in tough neighborhoods – and White Castle hasn’t abandoned those neighborhoods. On the surface, higher pay seems noble, but it’s not – because it denies the reality of the free-enterprise framework that has allowed small businesses like ours to thrive.”
Founded in Wichita in 1921, White Castle is considered the first fast-food chain in America. It currently has more than 400 locations (mostly in the Midwest and the NYC area) but remains a private company and is operated like an extended family. According to Mr. Richardson, all but six of the company’s top 450 operations executives started behind the stainless steel counter, wearing spotless uniforms and serving up “slider” burgers. Everybody reports to the home office, now in Columbus, Ohio; there are no franchisees.
If you’ve never tasted a White Castle, a frozen version is available at the grocery store. The microwaved burgers are reasonably tasty, but nothing like the real thing.
As an industry pioneer, White Castle spawned many imitators, including Krystal, which blankets the South and manages to consistently suck.