Why should I pay 68 cents more for a Big Mac in exchange for higher worker wages?
Would you pay an extra 68 cents for a Big Mac if it meant the workers could make $15 an hour? That’s how much one business student who analyzed McDonald’s financials says the price would go up to meet the demands of fast food workers demanding a living wage.
But KIRO Radio’s Don O’Neill says many customers wouldn’t be willing to eat the price increase.
“There’s a reason McDonald’s prices the Big Mac below $4,” he says, harkening back to his days selling cars, where he observed customers have a hard time making a jump to the next dollar.
“You take that Big Mac over $4 and it doesn’t matter if it’s up 58 or 68 cents or whatever. There’s some mental gymnastics there and it would really hurt the sales of the Big Mac,” Don says.
University of Kansas business student Arnobio Morelix, who did the analysis, tells Forbes a Big Mac meal would cost $6.66 rather than $5.69, and the chain’s famous Dollar Menu would go for $1.17.
“Some folks online are complaining they will not pay $2 for their Dollar Menu, but the truth is that even if McDonald’s doubled salaries, the price hike would not be 100%,” Morelix tells Forbes. “I will be happy to pay 17 cents more for my Dollar Menu so that fast food workers can have a living wage, and I believe people deserve to know that price hikes would not be as high as it is often portrayed.”
Don disagrees. “A dollar menu has to be a true dollar menu. I think that it is a big deal.”
Fast food workers have staged walkouts recently in Seattle and around the country demanding a higher wages. But many small business owners have argued increasing the minimum wage to $15 or more would drive them out of business. Morelix counters his study proves otherwise.
KIRO Radio’s Ron Upshaw points out Morelix failed to factor in the cost of a price hike to an entire family.
“You don’t just order one thing. Mom’s going to order a Big Mac and dad’s going to order a Bic Mac and the kids are all getting two or three things on the dollar menu so your individual bill isn’t going up 67 cents, it’s going to go up a couple of dollars,” Ron says.
As the arguments continue, Ron says the fundamental issue remains that entry level service jobs aren’t meant to be living wages.
“Why would that person be entitled to make $15 an hour,” he asks. “The meaning of the job is to make you want a better job. It’s not intended to support a family of four. It’s intended to give you a little bit of money and then you go ‘wow, I want to get an education, I want to raise my station.'”