When Workers Get $15 Per Hour, How Much Will Your Big Mac Cost? Why Should They Be Limited To $15, Why Not $345?

Drive-Thru Economics

December 5, 2013 by Ben Crystal 

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The Service Employees International Union and others believe fast food workers should earn $15 per hour.

It’s almost as if the left simply refuses to comprehend it, despite its simplicity. Americans will not pay more for the borderline-toxic trimmings and unidentifiable animal parts that we call “fast food.”

Liberals can kick up all the dust they want over the fast food industry’s average hourly wage of 8 bucks or so. They can demand every burger-flipper, fry-cooker and order-screwer-upper in the solar system be paid $45 per hour with full medical and dental benefits, two weeks paid vacation and stock options. They can even picket outside the Taco Bell from now until the Tex-Mex-ish chain offers a free-range chicken burrito with organically grown heirloom tomatoes and handmade guacamole. But they’re never going to convince anyone that a “McRib” should cost $14. Therefore, they will never convince anyone that assembling a McRib from whatever its actual contents might be is anything other than an entry-level job.

Yet our liberal friends from such notable organizations as the Service Employees International Union have retaken their places on picket lines in front of thousands of fast food emporia across the fruited plain. Their demands haven’t changed, nor has their chosen method of shrieking at the top of their lungs. They want the government to mandate the fast food industry pay a minimum wage of $15 per hour. Should they win this battle — and their access to virtually unlimited resources from spigots like George Soros and even the Barack Obama Administration (your tax dollars at work) suggests they’ll certainly continue the fight — their victory will result in either fewer fast food workers or no fast food workers.

Raising entry-level salaries in the fast food industry will do more than just jack up the cost of the No. 2 Super Combo with a Coke. It will force a reciprocal wave of cost increases throughout the industry. If the lettuce guy gets $15 per hour, then the assistant day manager will immediately demand an increase in her salary. After all, she worked for her promotion. Of course, once she gets a raise, the day manager will be in the boss’s office and so on, up through the chain until the company is left choosing between raising prices, lowering labor costs or simply shuttering operations. Since profit margins for the average McDonald’s franchise hover somewhere between 6 percent and 8 percent, something’s gotta give; and I doubt it will be the percentage of actual chicken in Chicken McNuggets. It’s worth noting that more than 50 percent of the labor force of McDonald’s is drawn from minority groups, meaning big labor’s assault on Big Mac will send a disproportionate number of minorities to the curb.

Liberals operate under the mistaken presumption that if a business makes a profit, then its workers must suffer. In fact, the only causal relationship that exists between a fast food company’s profits and its workers’ wages is a positive one. Without fiscal successes, McDonald’s doesn’t expand to become the largest company in the industry and one of the most ubiquitous icons on the planet. Without that expansion, there are 14,000 or so empty commercial spaces providing taxable income to the Federal, State and local — not to mention global — economies. Without that expansion, there are 14,000 or so fewer entities providing jobs. Including the corporate staffers of McDonald’s, that’s just shy of a half-million more Americans cast onto the government dole — a dole that would supported by a half-million fewer Americans. And the 1.3 million McDonald’s employees outside the United States would be thrilled to learn the American big labor movement turned their jobs into collateral damage.

But there is good news for the fast food industry’s millions upon millions of customers. Should big labor manage to force a 100 percent increase in the minimum wage, thousands of fast food employees will be replaced by hundreds of automated order-takers and -makers, dramatically increasing the odds that you’ll actually get what you ordered.