Sheryl Sandberg’s Minimum Wage Sandbagging

In a Mother’s Day post, Facebook COO Sheryl Sandberg’s called for a minimum wage increase. That’s easy for her to say. Her company wouldn’t be affected by the mandate that would disproportionately affect businesses with tiny profit margins.

Facebook’s 2016 profit was more than $10 billion.  It also employs 18,770 people. That means its profit per employee is $544,326 – more than enough to easily absorb workplace mandates like the ones Sandberg proposes.

Things are a little different in the rest of the economy. Restaurants, for instance, have a profit per employee that is roughly $6,600, according to an EPI analysis. That means a federal minimum wage increase in the $12 to $15 ballpark — a 66 percent to over 100 percent increase — would more than wipe out the financial benefits an employee produces. Under this scenario, it would actually cost businesses money to employ a starter employee.

These dynamics are playing out in real-time in places that are experimenting with dramatic minimum wage increases, including in Sandberg’s Bay Area backyard. Hundreds of businesses have been forced to reduce hours, lay off employees, or even close altogether as a result of the labor costs associated with minimum wage increases. (Specific stories can be found at

Restaurant owners would never consider advising the software industry how to structure its overhead or manage its margins. That’s because they know what they don’t know. Perhaps Ms. Sandberg could use a dose of that humility.