Please access the following article. http://money.cnn.com/2018/05/29/news/econom

Question

Please access the following article.  http://money.cnn.com/2018/05/29/news/economy/chick-fil-a-sacramento-wage/index.html

So, this gentleman is getting ahead of the minimum wage increase that will legally be required in California over the next few years. The question is "Is this a smart business decision?" In my world, a smart business decision can include short-term negative consequences (e.g., reduction in market share) so long as the business' long-term success is the ultimate consideration. The owner certainly seems to have a good justification. Do you think he's going to succeed or will this backfire on him?

Explanation / Answer

Yes, This is indeed a smart decision. The reason behind it was that since it costs the company a lot when low wage workers hold multiple jobs where full time jobs at low wages cannot provide then sufficient income where the workers move from one job to another and this can cost the company a lot especially with businesses like restaurant business. Since he'll be a lot selective in hiring people at a very high wage, though the cost seems to be high in the initial stages, the efficiency of workers will increase a lot which inturn increases the turnover in the long run on the whole.

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