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Super Cheap Fast Food Would Still Be Super Cheap If Workers Made $15 An Hour

Fast food companies can afford a living wage without blinking. And even if they pass it on to you, you’ll barely notice at the register.

Super Cheap Fast Food Would Still Be Super Cheap If Workers Made $15 An Hour
[Top Photo: Flickr user m01229

Fast food restaurants have faced protests all over the nation for the poverty wages they pay their employees. All of us consumers who gladly eat extremely cheap burgers and burritos and chicken wings are implicitly implicated: Workers are paying the price for our dollar menu savings.

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But while you shouldn’t let yourself off the hook for supporting companies that pay these wages, don’t fall for the idea that fast food companies would love to pay a living wage, but would have to increase prices so much that they would lose business. A new study from Purdue University School of Hospitality and Tourism Management proves that this is absolutely not the case. Fast food restaurants could easily treat their workers like human beings at almost no cost to the consumer. What would it take to pay workers a $15 wage? Only, on average, a 4.3% increase in menu prices.

Flickr user Chris Makarsky

Let’s do some math. That means McDonald’s dollar menu would suddenly cost a completely unaffordable $1.04 (though this is less catchy branding). A $3.29 spicy chicken sandwich at Chick fil A would cost $3.44. A $9.10 carnitas burrito from Chipotle–a chain that markets itself to young people based on its values, but doesn’t pay its workers living wages–would cost $9.52.

Of course, this is an average. Price increases would vary across the country and across menus, and might be more at restaurants that are now paying employees less than the average for the industry. But importantly, it shows–like another recent study from the University of Massachusetts–that the industry can absorb higher wages without cutting jobs.

And that is just if the companies decided to pass on the entire increase to the consumers. As the Washington Post notes, the numbers assume restaurants want to maintain their current profit margins. They could simply make slightly less money (McDonald’s made $1.03 billion last year; Chipotle made $83 million).

Yet another option at chains’ disposal? Simply cutting portion size. To keep prices the same and pay employees $15 an hour, restaurants could make food 12% smaller, the study found. Now that would be good for Americans’ wallets and waistlines.

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About the author

Jessica Leber is a staff editor and writer for Fast Company's Co.Exist. Previously, she was a business reporter for MIT’s Technology Review and an environmental reporter at ClimateWire

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