Home Depot co-founder: DC is insulated from 'the real world'

Bernie Marcus on Obama's handling of economy

This is a rush transcript from "Your World," January 28, 2014. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: All right. Well, businesses hike or say take a hike -- the president set to push a big increase on the minimum wage.

To Home Depot co-founder Bernie Marcus on that. Bernie, good to have you. Easier said than done, although the president`s opening salvo is federal contract workers now, everybody else later. What do you think?

BERNIE MARCUS, CO-FOUNDER, HOME DEPOT: Well, look, look, Neil, you know, I think the president is going to speak tonight.

And I just heard the congressman. And I think Washington is a separate place in the world. I think that they are insulated from the real world. And they ought to be the world that I have been in, in the last three weeks. I have been meeting with businesspeople all over the United States. And I have been meeting with small business owners, people that, for instance, run parking lots, people that run nursing care homes, people that clean up in office buildings.

And they hire people at the low end of the wage scale. And you ought to hear what they are talking about, Neil. What they are talking about is the fact that -- that, because of ObamaCare, many of them are going to part-time workers. One parking lot entrepreneur told me that 50 percent of his people are going to go on part-time. And he says, I feel so badly, he said, because these people really need the jobs, but I can`t afford the medical care. I just can`t do it. And I hope, in fending for themselves, that they are going to have as good a policy as the ones that are staying on my plan.

So, it`s -- it`s another world in Washington. The people in the business community, the small businesses especially around the country, they are struggling. When you ask them what they are going to do, many of them say, I don`t have a clue. They all tell you the same thing. Their insurance rates have gone up dramatically.

They are paying more for less. They are getting less. They are being covered for things that they don`t want to be covered for. So, Neil, it`s a mixed bag here. And wait, Neil, until the big -- big businesses, wait until the largest companies start getting hit at the end of...

(CROSSTALK)

CAVUTO: The employer mandate kicks in. You`re right about that.

MARCUS: Yes.

(CROSSTALK)

CAVUTO: But Bill Gates, the billionaire, had said, while he would be open to an increase in the minimum wage, I think, while he didn`t put a number to it, he was against a dramatic hike, and maybe something like this, a 40 percent hike, wouldn`t be his cup of tea, and that it would -- would, obviously, start pushing more corporations into automation and that sort of thing and defeat the whole purpose.

What do you think of that?

MARCUS: Well, now what`s going to happen -- let me give the real case. Here`s the real case.

I had somebody who ran restaurants. He has three restaurants today. And he talked about minimum wage. The first thing he said was, you know, the people that they are going to kill the most are entry-level people, because young kids don`t have families. They are coming in. They are coming into the workplace. We teach them discipline. We teach them how to dress properly. We teach them how to -- how to talk to people.

And then it`s at the upper scale. He says, so what happens here, if I raise my minimum wage, it doesn`t affect just minimum wage. Now I have to affect every level of it and said, and it`s a cascade, and what it eventually will cause me to do is eventually not make any money or I`m going to have to raise my prices.

(CROSSTALK)

CAVUTO: But, you know, Democrats say, Bernie, every time they hear that, we always hear that every time anyone wants to push raising the minimum wage, and none of these what they call scare tactics, although I know that`s not your intent, pan out.

What do you say?

MARCUS: Yes, but you -- no, but it does pan out, because you pay for it eventually.

Listen, I don`t know. You eat at Taco -- tacos -- at Taco Bell. I don`t eat there. But people who can`t afford to eat in other places eat at Taco Bell. And what is going to happen, and I will tell you it`s actually going to happen, is that they`re going to raise their prices. They are already talking about it. So it`s a fact of life. They will raise their prices.

So the people who eat there, who can`t afford it, who are eating the lower -- at this level of food, they are going to pay more, and, therefore, they are going to have less to spend on everything else. It`s a cascade.

CAVUTO: OK.

MARCUS: So, you know, I don`t know who they solve the problem with.

Look, entry level, I know this. At Home Depot, we never had people at entry level, we never had people at minimum wage. But we looked for skilled people. Now, how do you become skilled? You start somewhere and then you become skilled. You start to learn how to sell. You learn how to use a register, and then you go on to a bigger job.

CAVUTO: Very well put.

All right, Bernie.

MARCUS: So, all right.

CAVUTO: Thank you.

MARCUS: Thank you. Good to see you.

(CROSSTALK)

CAVUTO: Not bad for a guy who became a billionaire, and he didn`t have a handy bone in his body and created Home Depot. Amazing.

MARCUS: Come on now.

(LAUGHTER)

CAVUTO: Come on.

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