Friday, May 02, 2014

The Effects of a Minimum Wage Increase on Fast Food Prices and Unemployment

Here is my quick-and-dirty calculation of how fast food prices will increase under different minimum wage scenarios. The cost of food preparation for McDonald's is about 89% of total expenses, and I have taken that into account. If I did not, then the increase in prices would be more. The question for those who support proposed increases in the minimum wage, ask yourself if you are willing to pay the increased prices for fast food?  Would you really be willing to pay $12.87 for a chicken strip meal that now costs only $6.99?

The real effect of increases in the minimum wage is to raise unemployment.  The less efficient employees, the newbies, the inexperienced, will be fired.  This has always happened in the past when the minimum wage has been increased.  The Democrats are now claiming that a refusal to raise the minimum wage is "racist," but the truth is that increases in the minimum wage hurt blacks and Hispanics  the most, both in loss of jobs and higher prices for food.

To quote an old argument, would you rather be employed at $7.25 an hour, or unemployed at $10.10 an hour?



2 comments:

Question Diversity said...

A real minimum wage increase will probably hasten the mechanization of fast feeders.

Stogie Chomper said...

Yep.