Rubio’s Coastal Grill recently announced it is closing 48 restaurants in California due to rising business costs. This decision followed a new law signed by California Governor Gavin Newsom, raising the minimum wage for fast-food workers from $16 to $20 an hour. In response to the closures, billionaire entrepreneur Mark Cuban defended the wage increase, shedding light on a significant issue regarding how corporations pay their workers.
Collin Rugg, owner of Trending Politics, criticized Cuban and President Joe Biden for the economic situation on X (formerly Twitter). Rugg sarcastically suggested that the economy is thriving because Cuban and Biden claim it is.
Cuban, a well-known investor from the TV show “Shark Tank,” responded by highlighting that underpaid workers often need more government assistance, essentially meaning taxpayers are subsidizing these corporations.
Cuban argued that when corporations pay less than a living wage, the financial burden shifts to taxpayers, who end up covering the difference through government assistance programs. He believes it is better for companies to pay higher wages and find ways to increase productivity and profitability. A few years ago, Cuban gave his employees raises to avoid relying on taxpayer subsidies, emphasizing his preference for fair wages over public assistance.
Critics of the minimum wage increase worry it could hurt small businesses. However, Cuban, who has invested in many small businesses through Shark Tank, disagrees. He maintains that paying employees a living wage is essential and can be managed without harming business profitability. When questioned about the profitability of his investments, Cuban mentioned that he recently sold a portion of one company and is now doing well.
Cuban also addressed concerns about how he treats employees in businesses he sells. He stated that he had given bonuses to every employee who had been with the company for over a year. This practice reflects his belief in rewarding loyalty and ensuring fair compensation for workers.
Cuban’s defense of the minimum wage hike aligns with his support for Biden’s economic policies and his criticism of former President Donald Trump for not continuing the wage growth trends started under Barack Obama. Cuban’s comments come at a time when many Americans are critical of Biden’s handling of the economy, with concerns about a potential recession.
Many corporations, like Walmart and McDonald’s, continue to pay their employees wages that leave them reliant on government assistance programs. A new report has revealed just how underpaid employees at these companies are. The Government Accountability Office found that most adults receiving Medicaid and SNAP (formerly known as food stamps) work full-time but earn very little money.
The report examined data from 11 states and found that in each one, Walmart was among the top four companies with workers receiving government assistance. McDonald’s was in the top five in at least nine states. For instance, in Georgia, Walmart workers make up more than 2 percent of all non-elderly and non-disabled workers receiving Medicaid.
This data underscores Cuban’s point that low wages at large corporations result in a financial burden on taxpayers, essentially making the public subsidize these companies.
