• With: Craig Smith

    This is a rush transcript from "Your World," November 5, 2013. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST: All right, forget for the moment if this guy wins big. How does Chris Christie deal with this one if it wins even bigger?

    On the same measure, New Jersey's ballot calls for hiking the state's minimum wage by $1 to $8.25 an hour, then making it part of the constitution by guaranteeing increases pegged to inflation. Do you have such guarantees where you work?

    Swiss America chairman Craig Smith says that's why this is a real piece of work.

    You know, but it -- it's dicey as to whether it will pass or not. A lot of people think it will because it sounds good on paper and it's been sold as, look, only three percent of New Jerseyans work at the minimum wage. What's the harm to you?

    How do you answer that?

    CRAIG SMITH, CEO, SWISS AMERICA: Well, if you look at the studies, it's clear.

    I mean, 85 percent of the reliable studies out there, Neil, show that every time you raise the minimum wage, you hurt employment and you cause layoffs. I mean, that's just statistics. You can't get away from that. And so I think, if this wins, you're going to hurt the very people that they are trying to help.

    And think -- think about it, Neil. When you talk about minimum wage, that's really the wrong word. It's a learning wage that gets you in the door. Most people that start at minimum wage, two-thirds of those people will get a raise within their first year.

    This is feel-good legislation. It's probably great for an election time, but it's not going to help the economy. And I guarantee you, Neil, it will cost jobs. People will be laid off or prices will increase at the store and we need that like a hole in the head with -- with...

    (CROSSTALK)

    CAVUTO: Well, they...

    (CROSSTALK)

    CAVUTO: The people who are for this say that's really not the case. And even the governor of New Jersey has said, while he finds this type of approach a little screwed up, he is for seeing a higher minimum wage. A lot of conservatives are as well, that if everyone had their druthers, sure, pay more.

    I guess what is troublesome in this is that automatically indexing this to inflation, when -- when that obligates employers then of all sorts, all sizes to automatically index this sort of thing to inflation...

    SMITH: Yes.

    CAVUTO: ... even though their business might not be keeping up to inflation. It might be going just the other way.

    SMITH: You bet.

    And what if they can't raise prices to keep up with that inflation? And you're absolutely right, Neil. This -- this is -- look, during times that are tough like this, you never raise taxes, you never raise cost to businesses. Name me one mandate that has been put on a business that has made that business -- business more prosperous.

    This is the wrong time for this. And I don't care if the governor's for it or against it. Statistics are clear, Neil. This will hurt employment. And it will cause layoffs. And the people -- the proponents will say, well, those others will benefit, even though a few people will be laid off.

    What about the entry job levels that's -- that -- that are eliminated? Neil, this is just not the right time to raise taxes or raise minimum wage. And any economist will tell you that, Neil.

    CAVUTO: Well, California, Connecticut, New York, Rhode Island, the states that have this etched into their respective state constitutions, they are not exactly firing on all economic cylinders.

    Now, California is coming back. I think you could argue Connecticut's coming back. I don't know whether this has anything to do with that, but I -- I doubt it. So, I'm wondering whether this holds that comeback back.

    SMITH: Well -- well, think about it, Neil. If you're going to index these wages every year, what happens when quantitative easing, which ultimately is going to cause inflation, we know that -- $85 billion a month being printed right now is going to ultimately cause price inflation in the system.

    Then you add on top of that an automatic increase on wages to employers on top of that? Neil, that's got to hurt the consumer. It's going to hurt the working man. It's got to hurt the business owner. It just doesn't make economic sense. But that doesn't surprise me coming from these guys. I mean, as you know, my favorite saying is, the guys back East can mess up a one-piece puzzle, Neil. And they do a very good job at it, I might add.

    CAVUTO: I'm trying to think that through, if you have a one-piece puzzle. Oh, they messed it up.

    (LAUGHTER)

    CAVUTO: Craig, thank you very, very much.

    SMITH: And -- and, probably, the mayor didn't inhale, Neil.

    CAVUTO: Oh, my God. That's hysterical.

    (LAUGHTER)

    CAVUTO: Where is an NFL tie? What was the deal with all the NFL -- I don't know.

    (LAUGHTER)

    CAVUTO: Thanks, Craig.

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