(Update: Unfortunately, Morelix did not, as Forbes' Morgan Brennan first pointed out after publication, factor the company's franchisee model into his calculations. The research assistant said his math is based on increases in salaries and benefits for every McDonald's worker, from minimum wage line cooks paid $7.25 an hour to CEO Donald Thompson, who made $8.75 million in 2012. Morelix said that his number crunching assumes profits and other expenses are kept at the same absolute number. "We're not addressing the cause."įast Food Workers In Seven Cities Strike, Saying They Can't Survive on $7.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.īy his estimates, A Big Mac meal would cost $6.66 rather than $5.69, and the chain's famous Dollar Menu would go for $1.17. "Low wages for adults are a sign that something didn't go right in terms of education and work experience," he said. Bittlingmayer described discussions on fast food wages as a symptom of a larger problem: the U.S. But it will create some problems with McDonald's business model."ĭr.
If you're an empiricist, you have to say you don't know what the outcome will be. Fifteen dollars an hour is a huge jump from $7.25. "The actual effects of raising the minimum wage are up in the air," said Dr. University of Kansas School of Business economics professor George Bittlingmayer called Morelix's model "a little bit of a leap of faith."
#Cost of a big mac meal update#
McDonald's has not indicated that it'll be raising worker pay as a result of this week's strike Forbes has reached out to the chain for comment and will update this post with a response. This wage hike is, it should go without saying, entirely hypothetical. Why? In order to remain compeditive with rivals on price, the company, as economist Adam Ozimek pointed out earlier this week, would probably find a way to keep overall labor costs in check, most likely by reducing the number of workers and introducing more automation-think ATMs in the banking industry.) (Update, 2: Forbes contributor Tim Worstall argues that the answer to the question is simple: The cost of a Big Mac-at least to consumers-probably wouldn't go up at all. What a Big Mac would cost if McDonald's workers were paid $15 an hour remains an unanswered question, but it would almost certainly not be what Morelix says.) And that, as CJR.org's Ryan Chittum rightly points out, makes a big difference-as do a number of other factors excluded by Morelix.
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.īy his estimates, A Big Mac meal would cost $6.66 rather than $5.69, and the chain's famous Dollar Menu would go for $1.17.