The plight of McDonald’s minimum-wage workersmade headlines earlier this month when the burger chain published a much-maligned sample monthly budget, purportedly aimed at helping its staffers save money.
In recent days, armchair prognosticators have taken their concerns to the internet, wondering on Twitter and in comments sections whether they’d be able to afford McDonald’s MCD +0.96% food if the company doubled its workers’ wages.
Arnobio Morelix, a student at the University of Kansas School of Business, found himself asking the same question, so he did some financial modeling based on McDonald’s annual reports and data sets submitted to investors.
Morelix’s take: If McDonald’s workers were paid the $15 they’re demanding, the cost of a Big Mac would go up 68 cents, from its current price of $3.99 to $4.67.
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 said. “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.”
Phi Beta Iota: The article raises two key issues, the first being whether corporations should be obliged to pay living wages, which have always been part of the “triple bottom line” (financial profit, social equity, and ecological balance). The second is education — when a country has a surplus of badly educated people, it makes it much easier to impose poverty level wages. The third issue is not raised: what if McDonalds and other companies were severely penalized and obliged to pay the “true cost” of their bad food, a cost that can be tallied by focusing on the obesity epidemic that is raising health care costs to all stakeholders. McDonalds, like other corporations, operates under a publicly-granted corporate charter. The real problem is not McDonald’s — the real problem is a corrupt ignorant government system in which corrupt politicians keep ignorant bureaucrats from actually doing anything in the public interest.