An affordable Big Mac and a livable wage can coexist
The iconic burger would cost just 68 cents more if McDonald's doubled salaries for workers.
Updated Aug. 1, 2013.
The Huffington Post on Wednesday corrected its story's earlier financial analysis. Because the researcher didn't include the costs of franchise businesses, some significant payroll and employee benefits had been excluded in the original analysis. The price of a Big Mac would increase by $1.28, based on a doubling of pay and including franchise costs, the Huffington Post concluded.
One reason corporations say they can't afford to pay above the federally mandated minimum wage is their need to keep prices low and competitive.
But what would happen to the cost of Big Macs if McDonald's actually paid workers $15 an hour? Not much, according to a study from a University of Kansas researcher provided to The Huffington Post.
A Big Mac would cost just 68 cents more, while every item on the Dollar Menu would require an additional 17 cents, the study found. That includes a doubling of the salary of all McDonald's employees, from workers earning the base wage of $7.25 per hour to chief executive Donald Thompson, who was paid $8.75 million last year.
Currently, only 17 cents of every dollar McDonald's earns goes to paying wages and benefits for its 500,000 U.S. employees, according to University of Kansas research assistant Arnobio Morelix.
Of course, some consumers already think Big Macs are too pricey. The iconic burger, which costs about $4.20 on average in the U.S., has been losing ground to the chain's lower-cost options.
For diners on a budget, it may be a relief to learn that it's unlikely McDonald's -- or any other fast-food chain -- will pay workers a livable wage anytime soon. Many restaurant companies are balking at providing health insurance to full-time workers under Obamacare, prompting them and some fast-food chains to cut workers' hours to part time.
But advocates for a livable wage point to the dark side of those rock-bottom prices. Because people earning minimum wage often struggle to make ends meet, a single Wal-Mart (WMT) Supercenter store may require taxpayers to shell out as much as $1.7 million per year in government benefits, a recent study found.
While that McDonald's Dollar Menu item may feel good to your pocketbook, it may be sucking billions from the U.S. economy. After all, many minimum wage workers receive food stamps, an aid program that has swelled to $75 billion annually and now helps one out of every seven Americans put food on the table.
Looking at it that way, it may be a bargain to pay 68 cents more for a Big Mac.
Follow Aimee Picchi on Twitter at @aimeepicchi.
Article fails to point out the effects of such a wage increase on literally every other business. A person currently making $15 per hour will be thinking, "If a guy flipping burgers is worth $15 per hour, then I am worth more." This will send shock waves through out the economy. These types of jobs were never meant to support a family. The vast majority of them were always part time jobs, for people who needed them.
Just a thought - Our government cannot create jobs. In fact, many of their policies do the opposite. Maybe their support for this idea only stems from their inability to live up to their promises. We should hold government of any type to all its promises including keeping our economy growing. The key to a good job is education in a field whose long term prospects are bright. A part time job is not the answer nor is increasing the wages for part time jobs.
The minimum wage act was NEVER intended to provide a "living" wage for people. It was intended to prevent beginning workers and kids from being "slaves" and as a base for start up businesses.
Jobs at fast food places are not meant to support families, they are to build good working habits and experience for better higher paying jobs.
The world doesn't owe you anything; even a living wage. Build your own.
Too high a minimum wage would lead to a country called "Detroit".
Some recent college graduates are lucky to make $15 an our for their first entry level job. There is no reason a 16 year old needs to make $15 an hour to work maybe 20 hours a week taking drive thru orders. If they pay the crew $15 an hour (over 30k per year), will the managers be making $100k a year?
The minimum wage someone earns should not be legislated by the state(US Gov't), it rightly should be dictated by economics, what the market will bear for the skill of the employee, and it's corresponding worth to the company and the products it produces. PERIOD!
I know it's troubling to some that hamburger flippers can't afford to support a family, but what troubles me is the Liberal Intellectuals who put their social engineering agenda before what's practical for this country, and the laws of economics. Do we really want to raise a generation of hamburger flippers? Is that what we should aspire to as Americans? Or should we be teaching our children to aspire to a higher level, to actually strive to acquire skills that allow them to earn a wage they can raise a family on?
Sorry, but hamburger flippers are probably already earning what their skills are worth, if not more! Sorry liberal Intellectuals, but your ideals, although kind and caring, are encouraging the laziness and irresponsible behavior that is tearing the country apart, and making US uncompetitive in the global economy! This country already has more than enough people who will try to get by with the minimum effort, taking advantage of the system and stealing from others if they have to. We don’t need to encourage more of the same.
So they were right, an increase in wages to $15.00 an hour would increase prices by over 15%.
If the Big Mac costs $0.68 more that means the value meal will probably increase by a dollar. That will translate into fewer sales which means fewer workers will be needed.
Going to McDee's when I was a kid was a treat. Unfortunately now it is all people can afford to feed there kids.....Sad.
Maybe those folks already make far too much for what they actually do. You know all the Legacy Jobs where folks make a ton but do very little. And not just Government jobs, this is widespread across the Nation private or public. When real Workers make more, they can buy more, more Jobs can be created. When Corporations keep all the Profits and Cash Hoards for themselves, you have what we currently see, a Economy on Life support from the Global FEDS.
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