For years, jobs in fast-food restaurants have had a bad reputation—and bad pay to match. That hasn’t stopped an estimated 3.9 million Americans from landing behind the counter. In late July, thousands of fast-food employees in seven U.S. cities staged one-day strikes, demanding $15 an hour—about two-thirds more than the roughly $9 hourly wage a typical worker at these restaurants earns and twice the federal minimum wage of $7.25. Although the protests have ended with no imminent change in sight, they raise this question: What are the business consequences of paying fast-food workers a living wage?
Restaurant owners say that their businesses already operate on slim margins and they would be forced to increase menu prices, resulting in fewer customers—and jobs. Supporters of higher wages argue that at a time when corporate profits are higher than ever, there’s room to pay restaurant workers more. “People are always going to want to make more money,” says Steve Caldeira, chief executive officer of the International Franchise Association, many of whose members operate quick-service restaurants. “It comes back to, can paying higher labor costs be sustained over time in this economic environment?”
