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editorial

Fast-food wages: Pennies on the Big Mac

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This summer, fast-food workers are bringing something new to the table. In a series of one-day strikes in cities such as New York, St. Louis, and Chicago, workers have demanded a wage increase to $15 an hour, which in some cases would double their salary. They have taken a bold step in challenging an industry that is traditionally nonunionized, and both legislators and the CEOs of major fast food chains should listen to their arguments. The nation would be better off if fast-food workers earned a livable wage.

The fast-food industry has long staved off unionization, thereby depriving workers of a chance to bargain for better pay and benefits under federal guidelines. Outlets such as McDonald’s and Burger King have a 75 percent annual turnover in employees, making them difficult to organize for union purposes. Meanwhile, the franchise model on which these companies operate — in which stores are owned independently, but are strictly supervised by the corporation — makes large-scale negotiations complicated, as wages are set by both individual store owners and the company as a whole. Thus, the current strikes probably won’t be resolved through collective bargaining. But they could place significant pressure on state and federal lawmakers to increase the minimum wage.

An open letter, signed by more than 100 economists, states that increasing the federal minimum wage from $7.25 to $10.50 an hour would raise the cost of a Big Mac by only 5 cents, if McDonald’s also made slight improvements in productivity. A more modest hike to the minimum wage, to $9 per hour, would minimize harm to other industries, which — unlike fast food — have to contend with global competitors. For fast-food workers, a $9-per-hour wage would represent a big raise in many parts of the country. In higher-priced districts, where restaurant owners pay more for rent, they pass on the extra costs of doing business to their customers. They should do the same with higher wages, and customers can easily cover the extra pennies on the burger.

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