Here’s How the Price of Your Favorite Fast Food Would Change

[GURPS]

Here’s How the Price of Your Favorite Fast Food Would Change With a $15 Minimum Wage


Thousands of fast-food workers across 150 cities nationwide gathered today to call for a $15-an-hour minimum wage.

However, a report released today by James Sherk, senior policy analyst in labor economics at The Heritage Foundation, found that fast-food restaurants would have to boost their prices 38 percent to make up for the increased labor costs.

Such an increase, Sherk said, would drive away about one-third of these restaurants’ customers.

If fast food’s biggest restaurants decide to raise their wages to $15 an hour, here’s how some of your favorite meals would fare.

 

[TPD]

Here’s How the Price of Your Favorite Fast Food Would Change With a $15 Minimum Wage


Thousands of fast-food workers across 150 cities nationwide gathered today to call for a $15-an-hour minimum wage.

However, a report released today by James Sherk, senior policy analyst in labor economics at The Heritage Foundation, found that fast-food restaurants would have to boost their prices 38 percent to make up for the increased labor costs.

Such an increase, Sherk said, would drive away about one-third of these restaurants’ customers.

If fast food’s biggest restaurants decide to raise their wages to $15 an hour, here’s how some of your favorite meals would fare.

And how many of these striking workers would lose their job with a $15 wage and a 33% decrease in customers? Be careful what you wish for...

 

[Larry Gude]

Typical zero sum thinking. No one is going to be driven away. To what? To not eating? Anyone who spends $6 on a Crappy Meal is pissing money away anyway. They suddenly gonna start doing the math on a loaf of bread, cheese and lunch meat and start packing every day?

And, as far as that goes, maybe it will drive store owners to actually visit these places and start expecting more of their people. The ones I've been frequenting lately (Yes, I eat crap during delivery season) two McD's about 90 miles apart, both have way more staff than I see doing much of anything and are both pretty slow in my view. They both could, easily, get by with 1/3 less people.

VERY simple solution; get in front of a mic, agree to the wage hike AND, as part of the deal, agree to 1/3 less staff. Better, higher paying job for better, higher producing people and thank the union for making it better for everyone and caring. Let them eat the #### sammitch.

 

[kwillia]

Typical zero sum thinking. No one is going to be driven away. To what? To not eating? Anyone who spends $6 on a Crappy Meal is pissing money away anyway. They suddenly gonna start doing the math on a loaf of bread, cheese and lunch meat and start packing every day?

And, as far as that goes, maybe it will drive store owners to actually visit these places and start expecting more of their people. The ones I've been frequenting lately (Yes, I eat crap during delivery season) two McD's about 90 miles apart, both have way more staff than I see doing much of anything and are both pretty slow in my view. They both could, easily, get by with 1/3 less people.

VERY simple solution; get in front of a mic, agree to the wage hike AND, as part of the deal, agree to 1/3 less staff. Better, higher paying job for better, higher producing people and thank the union for making it better for everyone and caring. Let them eat the #### sammitch.

Yep. This is what I see coming. That and the fact that more and more tasks are becoming automated. There is no doubt in my mind that the money all these protesters are expecting to flow into individual paychecks will instead be invested in technology that will replace them.

 

[tommyjo]

typical stupidity one sees from The Heritage Foundation. Anything this group puts out can immediately be tossed in the trash.

The "study" extrapolates the results of prices rises at individual chain and tries to apply them to an industry wide, simultaneous price increase. That is apples and oranges...and typical of a GRUPS source.

The $15 per hour minimum wage is a dumb idea...just as is using The Heritage Foundation as an economic resource. The Heritage Foundation is a joke.

 

[Gilligan]

typical stupidity one sees from The Heritage Foundation. Anything this group puts out can immediately be tossed in the trash.

The "study" extrapolates the results of prices rises at individual chain and tries to apply them to an industry wide, simultaneous price increase. That is apples and oranges...and typical of a GRUPS source.

The $15 per hour minimum wage is a dumb idea...just as is using The Heritage Foundation as an economic resource. The Heritage Foundation is a joke.

Uh oh. You got so sidetracked spewing that you forgot to provide a source that refutes the one in OP. You need to focus.

 

[Larry Gude]

Yep. This is what I see coming. That and the fact that more and more tasks are becoming automated. There is no doubt in my mind that the money all these protesters are expecting to flow into individual paychecks will instead be invested in technology that will replace them.

Plus, the article takes the zero sum position that a company, a corporation, is going to sit there and just do nothing as 1/3 of it's customers go away. It's that 'GM think', that the world is static and this force or that problem will just be stared at.

 

[dontknowwhy]

typical stupidity one sees from The Heritage Foundation. Anything this group puts out can immediately be tossed in the trash.

The "study" extrapolates the results of prices rises at individual chain and tries to apply them to an industry wide, simultaneous price increase. That is apples and oranges...and typical of a GRUPS source.

The $15 per hour minimum wage is a dumb idea...just as is using The Heritage Foundation as an economic resource. The Heritage Foundation is a joke.

Hey lil fella!!...Now go back to the kids' table!!

 

[b23hqb]

Plus, the article takes the zero sum position that a company, a corporation, is going to sit there and just do nothing as 1/3 of it's customers go away. It's that 'GM think', that the world is static and this force or that problem will just be stared at.

Just curious - do you pay any or all of your part timers (if you have any) at least $15 per hour? Or is that why you rent trucks to make deliveries to keep the money in the business? Nothing wrong with keeping the money in the business, for sure. Your business, your money. Capitalism does work.

 

[Larry Gude]

Just curious - do you pay any or all of your part timers (if you have any) at least $15 per hour? Or is that why you rent trucks to make deliveries to keep the money in the business? Nothing wrong with keeping the money in the business, for sure. Your business, your money. Capitalism does work.

No and I am barely hanging on. Well, one. I was paying the guy $18, part time driver, and I asked him if he would go to $15. He turned around and walked to his truck.

Any other comparisons to McDonald's you'd like to make? Just curious...

 

[GURPS]

The ones I've been frequenting lately (Yes, I eat crap during delivery season) two McD's about 90 miles apart, both have way more staff than I see doing much of anything and are both pretty slow in my view. They both could, easily, get by with 1/3 less people.

way to many factors involved for your simple anecdotal comment

time of day being the biggest question
owners do not staff stores to have people standing around doing nothing


you are either prepping for the next rush, or cleaning up after the last one


we staff according to past business sales, if it is a slow day, we RTO to the business [i.e. send people home early]

 

[GURPS]

Any other comparisons to McDonald's you'd like to make? Just curious...

do you pay people to stand around and do nothing :shrug:

 

[GURPS]

Typical zero sum thinking. No one is going to be driven away. To what?

sure about that 5.69 maybe affordable, 7.82 may not .. adding 2 dollars a day or 10 dollars a week more is a deal breaker ...
... are you amusing McDonald's is as important as gasoline

 

[Larry Gude]

sure about that 5.69 maybe affordable, 7.82 may not .. adding 2 dollars a day or 10 dollars a week more is a deal breaker ...
... are you amusing McDonald's is as important as gasoline

No, I am not. I am assuming food is more important than gasoline. People are paying $7, 8 a pack for smokes and $10 a six pack for beer. And every step of the way SOMEONE said "That's it. No more." And, most everyone else just kept on buying. Is this going to allow some new chain to replace 14,000 McDonald's in the US over a couple of bucks a meal? They won't face the same issues and pressures?

 

[Larry Gude]

do you pay people to stand around and do nothing :shrug:

Yup.

Certain jobs require all hands for periods of time and then not so many as a part of the process transitions. My people HATE it when I am around because they know I'm gonna try and make more changes to limit that.

Another component of 'standing around' is having 10 people scheduled when you only need 8 so that when someone has to 'go to the DMV' or take the dog to the vet or whatever. So, sometimes, everyone comes in.

 

[SamSpade]

No, I am not. I am assuming food is more important than gasoline. People are paying $7, 8 a pack for smokes and $10 a six pack for beer. And every step of the way SOMEONE said "That's it. No more." And, most everyone else just kept on buying. Is this going to allow some new chain to replace 14,000 McDonald's in the US over a couple of bucks a meal? They won't face the same issues and pressures?

I can tell you this much - all other things being equal, if I'm spending THAT much for fast food - I'm ditching the fast food and sitting down to a regular restaurant.
I'm already waiting damned near forever in line for crap - if I'm going to pay that much more for it, it might as well be the good kind.

However -

"All other things being equal" is hard to guess - because I am guessing that if someone is now making 8 bucks an hour and wants 15, what of the people currently making 11 and 12 bucks an hour? Do they get nothing? Or do their slightly more skilled jobs just get a tiny bump - so that, for their skill, they get paid the same as a grade school drop-out?

 

[Larry Gude]

I can tell you this much - all other things being equal, if I'm spending THAT much for fast food - I'm ditching the fast food and sitting down to a regular restaurant.
I'm already waiting damned near forever in line for crap - if I'm going to pay that much more for it, it might as well be the good kind.

However -

"All other things being equal" is hard to guess - because I am guessing that if someone is now making 8 bucks an hour and wants 15, what of the people currently making 11 and 12 bucks an hour? Do they get nothing? Or do their slightly more skilled jobs just get a tiny bump - so that, for their skill, they get paid the same as a grade school drop-out?

All things are never equal. The argument that, over night, a Happy Meal costs $3 more is in defiance of how business works.

Over time, there was less and less in a box of cereal. Not all at once. Over time, prices creep up, a little at a time. Over time, a Big Mac, fry and a coke went from $.99 to, what, $5.50 or whatever it is.

You talk of being manipulated all the time, right? Well, the first manipulation is ALWAYS the 'sky is falling' argument. There is no argument to be made the McDonald's will sit there and lose 1/3 of their customers and do nothing about it. In the mean time, there is plenty of argument to be made that $10 an hour ain't much. I keep saying this; the problems for the working man are food and energy costs. Anyone who is watching their money is NOT buying McDonald's now. Anyone who is going to McDonald's is going to keep going as prices creep up over the coming years.

 

[SamSpade]

Anyone who is watching their money is NOT buying McDonald's now. Anyone who is going to McDonald's is going to keep going as prices creep up over the coming years.

I don't believe that fast food prices are inelastic. Some things are - gas, mostly. Double the price of liquor and people will drink weaker drinks.

If they do rise according to this idea, competition will shut it down. You will get more drive up only places.
They'll make burger machines. Or people will go to sit down places. Or some smart guy will create a make your own lunch place. Or cafeterias will come back.

Or people will lose jobs.

Or Big Macs will be made of filet. Or ribeye.

But no one's paying that much for crap.

Ten bucks an hour is realizable. Fifteen ain't. And I've seen plenty of data to support the idea that there's almost no one struggling to raise a family on one minimum wage job.

 

[Larry Gude]

Ten bucks an hour is realizable. Fifteen ain't. .

5 years ago $7.25 was realizable. $10 wasn't.

Again, this stuff doesn't happen over night. Wages WILL go up and sooner rather than later. And, as long as we have fiat money, whether that wage is 'right' or 'wrong', same as when it went to $7.25, the cost will be spread throughout the economy, just like it is now. And we, the people, will keep on wondering WTF is going on.

 

[SamSpade]

5 years ago $7.25 was realizable. $10 wasn't.

Again, this stuff doesn't happen over night. Wages WILL go up and sooner rather than later. And, as long as we have fiat money, whether that wage is 'right' or 'wrong', same as when it went to $7.25, the cost will be spread throughout the economy, just like it is now. And we, the people, will keep on wondering WTF is going on.

What do we disagree over? Larry, folks are arguing for the pay hike right now. Not ten bucks. Fifteen. Not in ten years. Right now.

Fast food places LIKE McD's are hurting. Big time. Others are taking their thunder (like Chik-Fil-A). And I do think if an industry across the board raises its prices, people will look elsewhere. When beef prices rise, people buy pork and chicken. It works that way.