Minimum wage hikes actually boosted my sales: CEO

Wetzel's Pretzels' CEO on minimum wage

Wetzel's Pretzels CEO Bill Phelps said Thursday minimum wage increases in California have actually helped his business.

"California raised the minimum wage in 2014 from $8 to $9 [per hour]. Our same-store sales were up 8 percent in the next six months," Phelps told CNBC's "Squawk Box."

He said same-store sales rose by more than 7 percent after California recently raised it again to $10.

On Monday, Democratic Gov. Jerry Brown and legislators reached a deal to increase the state's pay floor to $15 per hour by 2022-23. But the measure awaits approval from the full legislature.

The link between an increased minimum wage and increased sales at Wetzel's Pretzels is "not coincidence," Phelps said. "We have been up 4.5 percent historically for the last nine years."

"Low income people got a 10 percent increase, and probably a 30 percent increase in disposable income. So it's just great for our business," he said. "Ours is an impluse product. And these guys have extra money in their pocket today. So they can spend money."

Phelps said "it's crazy" that the federal pay floor has not been raised in seven years. The federal minimum wage stands at $7.25 per hour. "I think the minimum wage should increase more than every seven years."

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Wetzel's Pretzels, founded in Southern California in 1994, has about 300 locations nationwide and abroad. The privately held chain plans to open its first New York City store on Friday in Fulton Center in Lower Manhattan.

New York is also trying to increase the state minimum wage. Democratic Gov. Andrew Cuomo has proposed a hike to $15 per hour for the Big Apple by the end of 2018 and statewide by mid-2021.

Alongside Phelps on Thursday, Arthur Brooks, president of the conservative American Enterprise Institute, made the case on "Squawk Box" against raising the minimum wage.

"The biggest problem with the minimum wage is it destroys jobs at the very bottom, and we don't create jobs where we would have created otherwise," he said. "You can make more pay by other types of policies that actually don't distort the price signals and thus price some people out of the market."

But Phelps maintained: "Our business is great. And our business has been better since the minimum wage has caught up."