Some fast food executives say raising the minimum wage to $15 an hour would result in a trickled down pricing impact on their menu items that consumers will balk at at paying. I don't believe that.
Those CEO's skirt the fact that more money into the pockets of their employees would result in more money in the pockets of those consumers they say won't be able to afford their menu items.
If those employees were paid more they could afford:
- Child Care for their children.
- Purchasing vehicles.
- Renting/ Purchasing their own living quarters.
- To spend more on food and clothing.
- To come off public assistance - easing the burden on tax payers.
- To pay more taxes - easing the tax payer's burden.
- To invest in a multitude of good and services that would put a large percentage of that $15 an hour wage in others pockets.
So just how much would the cost of say, a Big Mac be if McDonalds implemented a $15 and hour wage for their employees?
A new study discovered if the minimum wage were increased to $15 an hour, prices at fast food restaurants would rise by an estimated 4.3 percent. That translates to the price of a McDonald’s Big Mac, which currently goes for $3.99,costing about 17 cents more, or $4.16.
The study from Purdue University’s School of Hospitality and Tourism Management also found that in order to compensate for the higher cost of employee compensation at limited-service restaurants, or those without table service or tipping, if they decided to change food sizes rather than prices, the Big Mac would shrink somewhere between 12 and 70 percent.
A size shrinkage of some fast food products is something consumers may be opened to. It would make some of these health flag products more appealing while keeping the prices in check.
The study doesn’t take into account the costs of turnover or any savings gained from higher wages.
“People often hypothesize that if you raise pay and offer benefits, turnover will go down. I don’t think we answered the question of whether that reduces turnover,” Richard Ghiselli, professor and head of the School of Hospitality and Tourism Management, said in a press release.
However, A previous study found that for every 10 percent increase in the minimum wage, turnover drops by 2.2 percent, and a $15 wage would come with $5.2 billion in savings for the fast food industry.
A higher, liveable wage would decrease turnover. Less employees will leave a jog that's paying them well. That's "Business 101" common sense.
It's obvious everything about increasing the minimum wage is a win win for everybody. What I can't figure is why some service and retail conglomerates remain opposed to it.