Before/After: What Your Food Will Cost You after a $15 Hourly Wage Hike

Craig Huey Culture Wars, Economics 5 Comments

Many city and state governments have passed laws to raise the minimum wage to $15.00 an hour.

Great intentions … but the unintended consequences are terrible.

These government-imposed wage hikes will:

  • Accelerate automation
  • Cause entry level jobs to disappear
  • See people laid off or jobs phased out
  • Hurt the poor and mentally/physically challenged the most
  • Lower investment capital and economic growth
minimum-wage-forced-hike

The unintended consequences of a $15 minimum wage

And there are other unintended consequences, too:

Higher costs for goods and services, once again hurting the poor the most.

Take fast food.

You may have heard—Wendy’s, like other restaurants, is phasing out cashiers and replacing them with I-pads to order food.

Here is a chart showing before and after projections for what a minimum wage hike will do:

Restaurant Food Item Price Before Wage Hike Price After Wage Hike
McDonald 10-piece Chicken McNuggets $4.49 $6.20
Starbucks Grande Mocha Frappuccino $4.56 $6.29
Subway 6-inch Turkey Sub $4.25 $5.87
Burger King Whopper Meal $6.49 $8.96
Taco Bell Crunchwrap Supreme,

Crunchy Taco, and large drink

$5.99 $8.27
Wendy’s Baconator  Combo $6.69 $9.23
Chik-Fil-A Chicken Sandwich Combo $5.95 $8.21
Pizza Hut Medium Hand-Tossed

Cheese Pizza

$11.95 $16.55

What do you think? Email me at [email protected].

Comments 5

  1. Something seems to be way out of line with those cost increase expectations of approximately 30~50% shown in the article. All the factors involved in projecting costs are extremely nebulous but, having been in the contracting business for 35 years, I believe for sake of argument, let’s assume the percentage of business expenses to sales price are usually in the neighborhood of: Labor cost=20% , plus material, equipment and outsourcing costs 50%, overhead 10% . So, if the new minimum wage is $15.00 as compared to currently $10.00, that is a 50% increase. A 50% increase of 20% (labor cost)= 10% . Then, adding that 10% cost increase for all other costs is 10% of 60%= 6%, for a total of 16%. Even though costs vary among various producers, this 16% rough estimate is far less than the 30~50% shown in the article. It sounds like a perfect example of “Fuzzy Math”, “Fake News”, and “Alternate Facts” all rolled into one, in order to create panic along with protests. Remember, when Henry Ford raised his labor rate to $5.00/day this was double the average—and he didn’t raise the price of his cars. Instead he got better, more efficient employees’ thus, increased production and more quality. The effect of paying low wages has only resulted in a huge increase in employees with low work and language skills and, an increase in immigrant workers taking jobs away from American youth, who need those jobs as entry level to the work force and, to provide incomes and skills while going to school.

  2. I tend to agree with Wayne Ford’s comment above to the articke on $15 hr wage hike. I have a relative that has worked at the same job for almost 30 yrs. starting at entry level and still is only at $10 an hr. $15 an hr would make a big difference in their life and sure isn’t going to put the employer out of business or cause rate hike in the employers services either.
    I know so many people that would be helped by a wage hike. $15 an hr is still very low pay for some folks that have been working minimum wage for years with no increase in pay

  3. I tend to agree with Wayne Ford’s comment above to the article on $15 hr wage hike. I have a relative that has worked at the same job for almost 30 yrs. starting at entry level and still is only at $10 an hr. $15 an hr would make a big difference in their life and sure isn’t going to put the employer out of business or cause rate hike in the employers services either.
    I know so many people that would be helped by a wage hike. $15 an hr is still very low pay for some folks that have been working minimum wage for years with no increase in pay, poverty isn’t good either.

  4. I would be interested in hearing from anyone who believes I’m wrong in my comments above, that I sent in on Mar. 4. If I’m wrong then I will have learned something. I just want to be correct–and will adjust my thinking accordingly if wrong.

  5. In 1982 I founded and ran as CEO till recently retired, a North American company that provides complex services to Fortune 1000 clients.

    You defeated your purpose to discuss a complex subject by including your bias. Bias has NO basis in running a “for profit” complex P&L or understanding how a large abrupt rise in the hourly wage dispersed across 30 or 500+ employee payroll, changes not only payroll expenses and taxes (that which the company pays out of profits), but pensions, probably healthcare contributions, and other downstream P&L operational expenses.

    Just as important doesn’t address how that drastic hike tells management their fiduciary duty is to reassess the value of hourly work product vs said increase, against potentially more profitable technology replacement options.

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