Mitt Romney is continuing his consolation tour of the nation, touting the ideas that handed him a decisive loss two years ago and “boosting” candidates around the country. Today, he’s taking his talents to Mesa, where he’ll campaign with Doug Ducey, a man with whom he has all too much in common.
The two slick-looking businessmen have made a lot of money in their careers, but neither of them seem to have workers in their best interests. As Governor of Massachusetts, Romney belied a campaign promise by vetoing a minimum wage increase, which was promptly overridden by unanimous votes in both chambers of the state legislation. That kind of audacity must impress a man like Doug Ducey.
Ducey has consistently spoken out against raising the minimum wage, and even went so far as to institute his famed singing-for-tips policy at Cold Stone Creamery, in part to avoid paying higher wages to his workers.
Ducey and Romney share other things as well, like a history of presiding over corporate layoffs. All in all, the duo promises to be a real treat for the guys at the top, but their agenda isn’t so sweet for working families.
Background:
Ducey Campaigning With Romney
Ducey Would Campaign With Romney On Thursday. According to Phoenix Business Journal, “Mitt Romney will be in Phoenix later this week to help Doug Ducey’s run for Arizona governor. Romney, the 2012 Republican presidential nominee and former Massachusetts governor, will appear at a Thursday rally with Ducey at the Mesa Convention Center.” [Phoenix Business Journal, 10/20/14]
Minimum Wage
Romney Vetoed Minimum Wage Increase
2006: Romney Vetoed A Minimum Wage Bill Despite Campaign Pledge To Increase Pay For Low-Wage Workers. According to the Boston Globe, “Romney rejected the Legislature’s plan to raise the state minimum wage to $8 an hour over two years, angering Democratic lawmakers and advocates who accused him of abandoning a 2002 campaign pledge to significantly boost the pay of low-wage workers. Romney, expressing concern that such a large increase would imperil the state’s economy, sent the bill back to lawmakers with his own plan: Raise the minimum wage from $6.75 to $7 an hour on Jan. 1 and have the executive branch study and possibly recommend further increases every two years.” [Boston Globe, 7/22/06]
- Romney’s Minimum Wage Veto Was Unanimously Overridden By The Legislature. According to the Boston Globe, “The Legislature unanimously overrode Governor Mitt Romney’s veto of a minimum wage increase last night, rejecting the governor’s view that the boost would hurt businesses and the poor. The override means that the state’s minimum wage will probably be among the highest in the country within two years. The legislation increases the $6.75-an-hour rate to $7.50 an hour on Jan. 1 and to $8 in 2008. The vote, at shortly before 8 p.m., followed very little debate, and though it appeared all Republican members of both chambers abandoned the governor, an official roll call was not immediately available last night. The House voted 152 to 0 to override Romney, and minutes later the Senate voted 38 to 0.” [Boston Globe, 8/1/06]
- Romney “Faced Pressure” On Minimum Wage Bill. According to the Boston Globe, “Now weighing a run for president, Romney may face pressure to veto the wage increase to play to pro-business Republicans.” [Boston Globe, 7/9/06]
Ducey Opposed Increasing The Minimum Wage And Refused To Pay Workers More Than The Minimum Wage At Cold Stone
Opposed Increasing Minimum Wage
VIDEO: Ducey Opposed Increasing The Minimum Wage. According to video of Doug Ducey’s response at the Arizona Hispanic Chamber of Commerce gubernatorial forum, “I built a company. Now I want to shrink your government and grow the state’s economy. The non-partisan Congressional Budget Office said that if we raise the federal minimum wage, America will lose 500,000 jobs. I don’t want to see us lose 500,000 jobs, I want to see us grow jobs and create the environment in which to grow jobs. So I’m opposed to it.” [Arizona Hispanic Chamber of Commerce Gubernatorial Forum, 2/8/14]
AUDIO: Ducey Did Not Support Raising The Minimum Wage. According to the Hugh Hewitt Show, “Well I’d start first – didn’t the Congressional Budget Office say that this would cost 500 thousand jobs if you raised it? I mean right there, why would you want to reduce jobs? Sure, in an ice cream store the margins are very small. In a sandwich shop the margins were very small. We couldn’t get away with paying minimum wage because these kids were great kids, they could go wherever they wanted. So we wanted to find ways, one, that we could pay them more which means you’d have to sell more ice cream, to more people, more often and in more locations so a franchisee could make more money.” [Hugh Hewitt Show, 4/24/14]
AUDIO: Ducey Opposed Raising Minimum Wage Because Businesses “Couldn’t Get Away With Paying Minimum Wage.” According to an interview with Doug Ducey on the Hugh Hewitt Show, “Ducey: ‘Well I’d start first – didn’t the Congressional Budget Office say that this would cost 500 thousands jobs if you raised it? I mean right there, why would you want to reduce jobs? Sure, in an ice cream store the margins are very small. In a sandwich shop the margins were very small. We couldn’t get away with paying minimum wage because these kids were great kids, they could go wherever they wanted. So we wanted to find ways, one, that we could pay them more which means you’d have to sell more ice cream, to more people, more often and in more locations so a franchisee could make more money. But we also that singing inside the store had people spontaneously tipping. So our kids would leave with, uh you know, cash from tips which you typically don’t get from fast food.” [Hugh Hewitt Show, 2/20/14]
AUDIO: Ducey Claimed That Raising The Minimum Wage Would Mean Allowing Kids To “Go Wherever They Wanted.” According to an interview with Doug Ducey on the Hugh Hewitt Show, “Ducey: ‘Well I’d start first – didn’t the Congressional Budget Office say that this would cost 500 thousands jobs if you raised it? I mean right there, why would you want to reduce jobs? Sure, in an ice cream store the margins are very small. In a sandwich shop the margins were very small. We couldn’t get away with paying minimum wage because these kids were great kids, they could go wherever they wanted. So we wanted to find ways, one, that we could pay them more which means you’d have to sell more ice cream, to more people, more often and in more locations so a franchisee could make more money. But we also that singing inside the store had people spontaneously tipping. So our kids would leave with, uh you know, cash from tips which you typically don’t get from fast food.” [Hugh Hewitt Show, 2/20/14]
Refused To Pay Workers More Than Minimum Wage At Cold Stone
Ducey: “McDonald’s Has Had A Great Influence On Cold Stone.” According to Nation’s Restaurant News, “Ducey, leader of the quickly growing Cold Stone Creamery ice creamchain, said he was happy to see Skinner and McDonald’s honored as the year’s top operator. ‘McDonald’s has had a great influence on Cold Stone,’ he said. ‘Wehave many former McDonald’s executives, and we’ve learned from the system’s longevity, their franchise model and their commitment to operations.’” [Nation’s Restaurant News, 10/30/06]
VIDEO: Ducey Claimed That He Came Up With Singing For Tips At Cold Stone In Order To Avoid Paying Workers More Than Minimum Wage. According to video of Doug Ducey’s response at the Arizona Hispanic Chamber of Commerce gubernatorial forum, “I built a company. Now I want to shrink your government and grow the state’s economy. The non-partisan Congressional Budget Office said that if we raise the federal minimum wage, America will lose 500,000 jobs. I don’t want to see us lose 500,000 jobs, I want to see us grow jobs and create the environment in which to grow jobs. So I’m opposed to it. Building Cold Stone Creamery, I believe minimum wage jobs is something that I know about. And I’m telling you, in the years we had rapid growth in developing that brand from 1996 to 2007, we had a tough time keeping a minimum wage employee. We had a booming economy in McDonald’s and In-N-Out Burger, Taco Bell and Smash Burger, all these new concepts were opening. Part of the reason we haThd this whole signing inside the store for tips was so that we could keep and retain these great high school kids that we brought on. So immediately wages were rising. So let’s have a booming economy, that’s the best way to get people out of a minimum wage situation.” [Arizona Hispanic Chamber of Commerce Gubernatorial Forum, 2/8/14]
Layoffs
As Head Of Bain, Romney’s Company Profited From Bankruptcy And Thousands Of Layoffs At Stage Stores
Stage Stores Was Emblematic Of Bain Bankruptcies: Bain Cashed Out 18-Times Its Original Investment And While The Company Used Drexel-Milken Junk Bonds To Underwrite Extensive Acquisitions. According to Newsweek, “The most emblematic among [Bain’s bankruptcies] was a roll-up deal focused on down-in-the-mouth department stores and apparel chains that were falling by the wayside in small-town America due to the arrival of Wal-Mart and the big-box retailers. Bain invested $10 million in 1988 and nine years later took out 18X its money—that is, a $175 million profit. Fittingly, Stage Stores Inc. was the last deal underwritten by the Drexel-Milken junk-bond machine before its demise. And the $300 million raised for this incipient LBO was exactly the kind of slush fund that Milken’s stable of takeover artists had used to acquire corporate castoffs and other bedraggled pots and pans that got rechristened as ‘growth’ companies.” [Newsweek, 10/14/12]
Bain Made A $175 Million Profit From Stage Stores
Romney’s Leveraged Buyout Of Stage Stores Resulted In A $175 Million Profit For Bain By 1997. According to Vanity Fair, “Romney’s deal with Drexel turned out well for both him and Bain Capital, which put $10 million into the retailer and financed most of the rest of the $300 million deal with junk bonds. The newly constituted company, later known as Stage Stores, refocused in 1989 on its small-town, small-department-store roots. Seven years later, in October 1996, the company successfully sold shares to the public at $16 a share. By the following year, the stock had climbed to a high of nearly $53, and Bain Capital and a number of its officers and directors sold a large part of their holdings. Bain made a $175 million gain by 1997. It was one of the most profitable leveraged buyouts of the era.” [Vanity Fair, 2/12]
Bankruptcy
The Washington Post: Bain Capital Bought Stage Stores, The Company Went Bankrupt. According to the Washington Post, “Another example: Stage Stores, which Bain bought in 1988 and later filed for bankruptcy in 2000.” [The Washington Post, 12/14/2011]
Shortly After Bain Sold Its Stake In Stage Stores, The Company Filed For Chapter 11 Bankruptcy. According to Vanity Fair, “Romney sold at just the right time. Shares plunged in value the next year amid declining sales at the stores. The department-store company filed for Chapter 11 bankruptcy protection in 2000, struggling with $600 million in debt, and a reorganized company emerged the following year. So ended the story of a deal that Romney would not be likely to cite on the campaign trail: the highly leveraged purchase, financed with junk bonds from a firm that became infamous for its financial practices, of a department-store company that had subsequently gone into bankruptcy. But on the Bain balance sheet, and on Romney’s, it was a huge win.” [Vanity Fair, 2/12]
Job Losses
Stage Stores Eliminated 5,799 Jobs During Bankruptcy. According to Houston Business Journal, “Stage Stores also assembled a new senior management team during its restructuring period. Before the company filed for Chapter 11, it had about 15,686 employees. As of Feb. 2, 2002, the company employed a staff of 9,892.” [Houston Business Journal, 7/5/02]
Under Ducey’s Leadership, Cold Stone Laid Off A Quarter Of Its Corporate Office, Over 50 Employees
December, 2005: Cold Stone Announced It Was Cutting Nearly A Quarter Of Its Corporate Jobs. According to the Arizona Republic, “Fast-growing ice-cream franchiser Cold Stone Creamery announced it was cutting nearly a quarter of its corporate jobs on Wednesday.” [Arizona Republic, 12/15/05]
- Company Said It Was Refocusing Its Strategy Toward Building Sales At Existing And New Stores Rather Than Concentrating On Developing New Franchisees. According to the Arizona Republic, “The company said it was refocusing its strategy toward building sales at existing and new stores rather than concentrating on developing new franchisees.” [Arizona Republic, 12/15/05]
- Fifty-Three Employees Were Laid Off. According to the Arizona Republic, “Fifty-three employees, from entry to executive level, in various divisions were laid off, leaving the company with 183 workers. Those laid off will be paid through the end of the year and given a severance package according to years of company service, said company spokesman Kevin Donnellan.” [Arizona Republic, 12/15/05]
Published: Oct 22, 2014