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Fast food: Would a higher minimum wage mean pricier burgers?

August 28, 2013|By Tiffany Hsu
  • Will this burger cost more if fast-food workers get a higher minimum wage?
Will this burger cost more if fast-food workers get a higher minimum wage? (Simon Dawson / Bloomberg )




Sylvia Allegretto, a labor economist and co-chair of the Center on Wage and Employment Dynamics at UC Berkeley, said it’s unclear whether a minimum wage bump would have enough of a ripple effect to affect consumer wallets.



Michael Saltsman, research director of the Employment Policies Institute, added that menu prices aren't set in a vacuum.





Saltsman points to a 2006 study that found that each 10% increase in the minimum wage boosted quick-service menu prices by 1.6% and could reduce industry employment by as much as 2.5%.

Based on those figures, a $15 minimum wage would cause as much as a 17% surge in fast-food prices and a nearly 27% slide in employment, Saltsman estimated.


Labor eats up a huge chunk of a restaurant’s revenue -- roughly a third, according to the National Restaurant Assn. And the fast-food industry is notorious for its employee turnover – greater than 75% annually, according to some estimates.



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