Hamburger bill: Will the cost of the Big Mac go up?
(Update and correction: The study cited in the piece was shown to be flawed, because it failed to take into consideration McDonald's franchising model. However, Tim Worstall over at Forbes.com writes that the fluxuation in price of a Big Mac in the face of increased wages would be: nothing. Because in a capitalist system, the cost of production does not determine the price of sale. Instead, the cost of sale is determined by supply and demand. Companies will charge the maximum price that they can get away with before the demand for the product declines.)
Fast-food giant McDonald's is creeping its way into headlines again.
After its last debacle a couple of weeks ago, when the company released a "helpful" budgeting journal featuring a budget that a person earning a McDonald's wage could not afford, McDonald's is once again under the financial warming light.
According to the researchers at the University of Kansas School of Business, in order for McDonald's lowest-paid employees to make $15/hour (about twice what they can earn now), a Big Mac would cost whopping $0.68 more than what it currently costs, bringing it up from $3.99 to $4.67. The Dollar Menu items would also see a 17 cent increase.
This bit of information comes as fast-food workers in multiple cities are on strike, asking for a wage of $15/hour. They claim that they cannot actually survive on the wages that hover around the national minimum wage, $7.25. (According to the National Employment Law Project, the median hourly wage for a front-line McDonald's worker is $8.94. At that wage, a person working 40 hours a week, 52 weeks a year, with no vacation or sick leave, would make $18,595.20 before taxes (or health care or child care)).
Way back in the day, John Paul II supported the Polish Solidarity movement, which worked to advance the cause of trade workers. It was about organized labor, despite the government's attempt to bust the union. Pope John Paul II went on to talk about solidarity with the poor, particularly in the encyclical Sollicitudo Rei Socialis, when he wrote, "Solidarity helps us to see the 'other'--whether a person, people or nation-not just as some kind of instrument, with a work capacity and physical strength to be exploited at low cost and then discarded when no longer useful, but as our 'neighbor,' a 'helper' (cf. Gen 2:18-20), to be made a sharer, on a par with ourselves, in the banquet of life to which all are equally invited by God."
These words, written in 1987, are as important today as they were then, particularly in light of labor struggling to organize, and of corporations working to maximize profit and minimize cost - even at the expense of its own workers.
We can know this - corporations will not change on their own, for the most part. Though a few organizations have made decisions to pay their front-line laborers a living wage, most corporations will not until and unless they are compelled to do so, either by direct government intervention or by consumer pressure. Most of us are not legislators, but we are all consumers. We can put the pressure on corporations to treat their workers better by being willing to pay an extra 68 cents for a hamburger. Because people who are working should not have to choose between food and rent.