McDonald’s employee wages battle just took a turn in the employees’ favor. Analysts have been trying to figure out how much prices will have to go up to concede to the little guy’s demand for $15 an hour. Turns out, they wouldn’t have to change much at all.
The argument against raising wages to $15 an hour is that it would compromise the fast food giant’s low-priced menu options, and that the company would see a drop in profits because customers would be unwilling to pay more for the same food.
But this is B.S. according to University of Kansas research assistant Arnobio Morelix. Doubling McDonald’s employee wages across the board – meaning every minimum wage worker gets $15 an hour and even CEO Donald Thompson grabs an extra $8 million in yearly salary – would only cause the price of a Big Mac to increase by a measly 68 cents.
In other words, paying everyone from the counter clerks to top corporate management double what they earn now would make the Big Mac cost $4.67 instead of $3.99.
The only place on the menu where a significant difference would be made is the dollar menu. Items there would go up 17 cents.
For the study, McDonald’s 2012 annual report was reviewed by Morelix. It showed that only 17.1 percent of McDonald’s overall revenue goes toward salary and benefits. So for every dollar McDonald’s makes, only about 17 cents goes toward income and benefits for over 500,000 U.S. employees.
Thus, if executives wanted to cave to the demands of their workers and keep profits and expenses the same, it would need to increase prices by just 17 cents per dollar. Sure, a commons criticism of big business is that extra costs are always passed on to the consumer, but 17 cents more per dollar isn’t exactly a deal breaker for your fast food fix, is it?
What do you think of McDonald’s employee wages? Would you be comfortable paying an extra 17 cents on the dollar so that their workers can earn a livable wage?