You could call it the French fry revolution, as fast food workers from seven cities take to the streets this week, demanding to be paid a living wage of $15 an hour from the restaurants that employ them. As my co-host Jeff Macke and I discuss in the attached video, in addition to the financial demands of hiking the minimum wage, the union-backed group Fast Food Forward is, for the third time since November, also calling for better benefits, more hours and, unsurprisingly, the right to unionize.
Although unlikely to succeed, a 100% pay hike would clearly improve the livelihoods of an estimated four million fast food workers, but ultimately, it would be paid for by customers, rather than huge multi-national corporations.
While difficult to compute what the exact impact of increased labor costs would have on prices, a University of Kansas researcher figured the average price of a Big Mac would go up 68 cents, from $3.99 to $4.67. And items on the famous Dollar Menu would go for $1.17 each.
A separate analysis suggests a wage hike of that size would cost McDonald's alone over $8 billion a year.
However reasonable the "living wage" idea may seem on the surface, labor costs are a very real and complex issue for corporate America, and especially those businesses that employ the most unskilled workers.
Just take a look at Yum! Brands (YUM), the world's biggest restaurant chain operator. The company has over 39,000 Kentucky Fried Chicken, Taco Bell and Pizza Hut outlets worldwide, but only 18,000 are in the U.S., and 80% are either licensed or operated by franchisees, many of whom are small business owners rather than billion dollar multi-national corporations.
It would also come at a time when fast-food sales are already under pressure in the U.S. and struggling to grow, and industry watchers predict a dramatic wage increase would likely lead to shorter shifts or outright lay-offs, further automation (think self-check kiosks), as well as reduced opportunities for unskilled teenagers.
Of course, President Obama made a similar, albeit lesser, pitch in February when he called for a 25% increase in the federal minimum wage to $9.00 an hour, saying "no full-time worker should live in poverty." But even at $9 an hour, the annual pre-tax pay of $18,700 annually for a family of four is still below Federal poverty guidelines.
Add in the fact that many so-called quick serve restaurant workers are already paid above the minimum wage, as well as the fact that opportunities abound for motivated employees to advance from the bottom rung of the labor ladder, and this effort to move fast food forward, could end up setting a lot of people backwards.
More from Breakout:
- minimum wage