How Much Would Big Macs Cost If McDonald’s Paid $15 an Hour?

Photo (cc) by MPD01605

Would you like a living wage with that?

Workers at McDonald’s and other fast-food restaurants have been protesting in several cities and demanding $15 an hour, The New York Times says. We’ve also learned in news reports that some McDonald’s employees are paid with fee-heavy prepaid cards, and that a budgeting guide the chain put out for its employees had multiple jaw-dropping conclusions, including that employees would need two full-time jobs to make ends meet.

Some people are asking how much it would raise the cost of McDonald’s food if employees got a wage increase. In a March hearing on the federal minimum wage, U.S. Sen. Elizabeth Warren, D-Mass., suggested that raising it to $10.10 an hour would increase the cost of a McDonald’s combo by just four cents. The national median pay of fast-food workers right now is $9.05 an hour, the Times says.

Arnobio Morelix, an undergraduate student at the University of Kansas business school, tried to do the math for $15 an hour. His findings were covered by Forbes and The Huffington Post, among others. Morelix’s math suggested a $15-an-hour minimum wage at McDonald’s would raise the cost of a Big Mac by 68 cents, a Big Mac combo nearly a dollar, and Dollar Menu items to $1.17.

However, he apparently based his analysis on McDonald’s corporate earnings and didn’t account for the fact that more than 80 percent of McDonald’s restaurants are franchises and not corporate-owned, HuffPo said. If McDonald’s franchises spend close to what a typical fast-food restaurant does on labor (about a third of income), that increase would look more like $1.28 for a Big Mac, it said.

Dean Baker, co-director of the Center for Economic and Policy Research, told The Huffington Post such an increase would require some layoffs, but would not put McDonald’s out of business and would reduce turnover.

Restaurant industry analyst Bonnie Riggs, however, said doubling wages for all workers was “not even in the realm of feasibility.” A 24/7 Wall St. analysis suggests it would cost McDonald’s an extra $8 billion a year to meet worker demands.

Assuming you eat at McDonald’s, would you be willing to pay somewhere between 68 cents to $1.28 more for a Big Mac if it meant the employees had a stable job that paid a living wage? Let us know your thoughts on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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