What Would Doubling McDonald's Salaries Cost You?

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August 1, 2013

Fast Food Workers On Strike
Image courtesy of BusinessReviewUSA.com.

If you were in New York on Monday and walked by a McDonald's restaurant you might have noticed a bunch of employees striking outside the joint. Now, you may not have paid that much attention and just headed over to a Burger King (since we all know the King is better anyway), but they are asking for two things.

They want a salary increase to $15/hour (which would be double the minimum wage they now earn) and they want the right to unionize without fear of retaliation. And it isn't just McDonald's employees. It is all fast-food workers. And it isn't just in New York either. In fact there are strikes planned all week in seven other American cities.

A living wage and the right to unionize seem like very reasonable requests to me. But in the end, people are selfish and only really care about how things will affect them. Which means most of you are reading this and wondering how much McDonald's food would cost were they to give their employees a raise. And the answer is, not a whole lot!

According to a University of Kansas student, Arnobio Morelix, the price of a Big Mac would go from $3.99 to $4.67. That's an increase of just 68 cents. And what about all those items on the dollar menu? Well, those would all get 17 cents more expensive.

Morelix looked over McDonald's 2012 annual report and saw that only 17.1 percent of their revenue goes toward salaries and benefits for its more than 500,000 U.S. employees. Extrapolating from that, she calculated that if executives were to double the salaries, but wanted to maintain the same profits and expenses, they would need to increase prices by 17 cents for every dollar.

And I'm sure if McDonald's CEO Donald Thompson were to take a little salary cut (he made $8.75 million last year) that number could be even lower. But we all know that would never happen.

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Posted by A.K. Anderson at August 1, 2013 1:01 AM

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