Fast food workers demanding higher wages walked off their jobs Thursday in dozens of cities. The workers, from giants such as McDonald’s, Wendy’s, KFC, Domino's Pizza and Burger King, are calling for at least $15 an hour. If they get what they want, experts say the companies will almost certainly raise prices on your burgers and fries.
How much do the workers actually earn?
The mean hourly wage for fast-food cooks stands at $9.07 and the mean annual wage rings in at $18,870, according to the Bureau of Labor Statistics.The lowest paid fast-food cooks work in West Virginia, where they earn $8.18 an hour and the highest paid work in Connecticut for $11.69.
What is the minimum wage?
Since 2009, the federal minimum wage in the United States has been $7.25 per hour and President Obama has called for an increase to $10.10. Some states and municipalities have set minimum wage levels higher than the federal level, with the highest being $9.32 per hour in Washington. Connecticut has passed legislation to raise the minimum wage from $8.70 to $10.10 by 2017 and the city of Seattle has passed a local ordinance to increase it to $15 an hour by 2021.
What do fast-food workers want?
Workers are demanding that the $200 billion fast food industry more than double starting salaries to $15 an hour from the current $7.25 minimum wage.The strikes mark the latest salvo in a two year-long battle to get not only higher wages but also to unionize without facing retaliation from employers.The unions argue that a growing number of minimum wage fast food workers are not teenagers, but adults trying to support families, particularly since the Great Recession.
What do the restaurants say?
McDonald's, which has 3,000 restaurants in the U.S., notes that about 90 percent of those locations are independently owned and operated by franchisees who set their own wage levels. "McDonald's and our independent franchisees support paying our valued employees fair wages aligned with a competitive marketplace," spokeswoman Lisa McComb said in a statement. "We believe that any minimum wage increase should be implemented over time so that the impact on owners of small and medium-sized businesses -- like the ones who own and operate the majority of our restaurants -- is manageable."
Wendy's was more circumspect: "We're proud to give thousands of people, who come to us for an entry-level job, the opportunity to learn and develop important skills so that they can grow with us or move on to something else," a spokesperson said.
Will I end up paying more for a burger and fries?
"Absolutely!" said Steve West, a restaurant industry analyst for ITG. "Most (restaurants) will pass it along to consumers. Recently we have seen some minimum wage increases in Seattle and what was the first thing that restaurants did? They are already adding a surcharge."
Andrew Puzder, CEO of CKE Restaurants, which includes Hardees and Carl's Jr., also warned that prices will rise if they have to pay workers more. "When the minimum wage increases, there are two things you can do," he told CNBC recently. "One is you can reduce the amount of labor that you use or you can increase your prices." But with increased costs from food, taxes, fuel, health insurance and regulatory compliance, Puzder said businesses can only raise prices so much before customers become less willing to shell out.
He also said that in states where the minimum wage has gone up considerably, "franchisees are closing locations." If the federal minimum hourly pay shoots up to $10.10, Puzder predicts fewer entry-level jobs will be created. If this happens, CKE would also create fewer positions, he forecast.