MSNBC's Lawrence O'Donnell explains why McDonald's will still make more money if they give their workers a higher salary.
Fast food workers are taking their grievances to the street this week, striking and rallying for higher wages. Restaurant companies say that would cause prices to spike.
MSNBC’s Lawrence O’Donnell broke down the numbers in his latest Rewrite segment, pointing to new research by Arnobio Morelix at the University of Kansas. The study, which looked at labor costs at McDonald’s, found that if you double every salary of every worker at the fast food chain, the price of a Big Mac would increase just 68 cents from $3.99 to $4.67. This estimate includes doubling the salary of CEO Donald Thompson who makes nearly $9 million dollars a year.
If you take Thompson out of the equation, and if you raised salaries of people working at McDonald’s restaurants by 50%, that move would add 25 cents to every Big Mac.
O’Donnell listed the price of Big Macs in various cities around the country: “In Albany, New York, where the minimum wage is $7.25, a Big Mac costs $3.99. In Riverside, California, a Big Mac also costs $3.99, but the California minimum wage is 75 cents higher.” He noted San Francisco’s higher minimum wage at $10.55, adding “McDonald’s still wants to do business there.”
“Increasing the minimum wage is good for business. It puts more money in consumers’ pockets,” argued O’Donnell. “So what will really happen to McDonald’s the next time the minimum wage goes up? The same thing that has happened to McDonald’s every time the minimum wage has gone up: McDonald’s will make more money.”
In many states, the minimum wage is $7.25 — the same as the federal minimum wage.