They Can Afford It! New Report Shows the Fast Food Industry Can Afford to Pay Higher Wages (Duh)
There’s a great new report out from the Political Economy Research Institute of the University of Massachusetts at Amherst. The report shows that the fast food industry could “fully absorb” a minimum wage increase from $7.25 to $15 over four years. “Fully absorb” is technical talk for: the industry can easily pay workers more without affecting its profit margin. Why? Because the economists found that increasing wages decreases turnover and turnover is costly. It’s super expensive to hire and train new workers and, precisely because of poor pay and benefits, the fast food industry has exceedingly high turnover rates. As for increased food prices, the study assumes a 3% increase in the price of food; not anything to be alarmed about. And this is assuming no change at all to the crazy, over-the-top executive compensation across companies in the sector: Consider that the CEO of McDonald’s made $9.5 million in 2013. That’s the equivalent to more than $4,000 an hour. So, what do you say McDonald’s, let’s see you stand up for a $15 federal minimum wage. We know you can do it.
Photo: Steve Rhodes