How Would $15 Minimum Wage Affect Fast Food Prices? (Chart)

An American think tank has released a study detailing possible effects of the proposed $15 per hour minimum wage in response recent protests by labor groups across the United States.

The results of the study, conducted by the Washington, D.C.-based Heritage Foundation, predict that sales and profits would drop significantly for fast food restaurants if the minimum wage increase were to take effect, according to the IJ Review.

Profits would plummet nearly 80 percent and sales would drop 36 percent if the wage hike occurred, according to the Daily Signal.

The number of hours employees can work would also decrease by 36 percent and the average prices of food items would increase 38 percent, based on the study’s findings.

To break it the effects on prices further, the Daily Signal estimated that certain popular fast food items or combos, such as the Big Mac meal and the Taco Bell 3 crunchy taco combo, would increase their costs by about $2 each, defeating the purpose of them being marketed as cheap fast food.

The study also suggested that the wage increase could change the demographic of workers employed at fast food restaurants and force workers to gain more skills before obtaining jobs in the business. Additionally, more companies might turn to using machines instead of people to try and perform basic tasks, according to the study.

The report is based off of 24 years of studies regarding operational costs and more than 30 years of reports about price and demand in relation to food prices.

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Source: IJ Review, Daily Signal, The Heritage Foundation


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