Of all the stoopid, stoopid arguments against raising the minimum wage to $15 an hour, by far the most stoopidest is the claim that higher wages would price fast food beyond the means of low-wage workers. "It would definitely hurt the consumer," International Franchise Association president Stephen J. Caldeira recently told the New York Times.
So how unaffordable might your favorite fast-food burger become should restaurants be forced to pay their employees a living wage? Caldeira warns that prices could rise by as much as 50 percent.
But that is bullshit.
Fifteen dollars would represent a 60 percent premium above Washington State's 2013 inflation-indexed $9.33 an hour minimum wage, but the fast-food industry estimates that labor accounts for only one-third of its total costs. One-third of 60 percent equals a 20 percent hike in operating costs.
But fast food is already incredibly cheap. I walked into the McDonald's on Madison Street last week to be confronted with a plethora of Dollar Menu and Extra Value Meal choices. Two bucks plus tax bought me a burger and a coffee. The coffee was actually good.
So even given a worst-case scenario in which the entire cost of higher wages is passed on to consumers in the form of higher prices, Seattleites would still only pay a far-from-wallet-busting $1.20 for an iconic McDonald's hamburger. That's 20 percent more than the current Dollar Menu price, but—adjusted for inflation—about 20 percent less than the same burger cost when McDonald's first opened back in 1948.
And again, that's just a worst-case scenario. The highly profitable fast-food industry might choose to narrow its margins rather than pass on the full cost of a wage hike to consumers. At the same time, higher wages should also lead to higher productivity, lower turnover, and other cost savings.
And that 60 percent wage premium over the state rate assumes that Seattle's minimum wage jumps to $15 all at once. More likely, it will be phased in over several years before being indexed to inflation (probably by the end of mayor-elect Ed Murray's first four-year term). By then, inflation will have eaten away at the proposed $15 an hour rate to lower Seattle's wage premium below 50 percent. So adjusted for inflation, that $1.20 burger would actually be a few cents cheaper.
Will prices go up? Sure. Maybe 16 percent. Some economists—such as Ken Jacobs, chair of the UC Berkeley Labor Center—estimate as little as 10 percent. It's a small price to pay to lift tens of thousands of Seattleites out of poverty.
And considering that, adjusted for inflation, the same 15 cents that bought you a McDonald's hamburger back in 1948 buys you a $1.49 double cheeseburger today, it's hard to argue that consumers can't afford to pay a little bit more for their burgers.
In the end, it's not the cost of a fast-food burger that is breaking the bank for Seattle's low-wage workers, but our city's skyrocketing housing costs. According to the real-estate tracking website Zillow, buying or renting a home in Seattle costs nearly twice as much as in Spokane, and yet minimum-wage workers will earn the same $9.33 an hour here in 2013 that they'll earn in much more affordable parts of the state. For the same reasons that Washington needs a higher minimum wage than neighboring Idaho, high-cost Seattle needs a higher minimum wage than much of the rest of Washington.