A major review of all the available research on how minimum wage increases impact job growth found that it’s close to zero, and state-level reviews found that those that have raised wages over recent decades haven’t hurt job growth. In the face of a planned minimum wage increase in Georgia and Alabama, for example, fast food restaurants were going to respond by raising employees’ performance standards. Real world evidence also supports the idea that fast food would deal with higher wages without cutting jobs. Other research has found that all employers could react to higher minimum wage costs in the same way - through savings from reduced turnover, higher prices, improved efficiency, and increased demand - and therefore avoid layoffs. That study also found that between the extra money from higher prices, savings from lower turnover, and greater overall economic growth, the fast food industry could easily cover the increased costs of having to pay a $15 minimum wage without reducing any jobs and still have money left over. A previous study found that for every 10 percent increase in the minimum wage, turnover drops by 2.2 percent, and a $15 wage would come with $5.2 billion in savings for the fast food industry. In 2013, the turnover rate for franchises was 93 percent, and it can cost $4,700 per worker who leaves. I don’t think we answered the question of whether that reduces turnover,” Richard Ghiselli, professor and head of the School of Hospitality and Tourism Management, said in a press release. “People often hypothesize that if you raise pay and offer benefits, turnover will go down. The study notes that it doesn’t take into account the costs of turnover or any savings gained from higher wages. The price increases would be a good deal larger if the minimum wage were raised to $22 an hour, or average private sector pay: the authors found they would increase by 25 percent, raising the price of a Big Mac by about a dollar. The study from Purdue University’s School of Hospitality and Tourism Management also found that in order to compensate for the higher cost of employee compensation at limited-service restaurants, or those without table service or tipping, if they decided to change food sizes rather than prices, the Big Mac would shrink somewhere between 12 and 70 percent. That would mean a McDonald’s Big Mac, which currently goes for $3.99, would cost about 17 cents more, or $4.16.
However, if you’re interested to see a tastier than usual look at cost of living (and relative wages) this is a pretty good big picture breakdown.If the minimum wage were increased to $15 an hour, prices at fast food restaurants would rise by an estimated 4.3 percent, according to a new study. So, if you’re looking to buy a Big Mac, you should get the price from the menu board near you. Since states are big and offer a diverse range of cost of livings, this price may not reflect the price you see at the drive-thru.įor example, densely populated areas often have higher prices, an eater in a rural city may see a lower price. We opted to only include the Big Mac, and not the meal price. Our data on Big Mac prices comes from .įrom there, we found the average Big Mac price in each state- identifying the most (and least) expensive states. How We Determined This - And What It Means In general, the Midwest is a pretty cheap place to visit Mickey D’s. Mississippi is the cheapest with the trademark burger only coming to $3.91. In the 12 states above, a Big Mac for $4.07 or less. Notoriously pricy Hawaii goes as high as $5.31. A Big Mac- not counting fries or a drink- costs over $4.65 in all of them. McDonald’s isn’t quite so cheap in the above states. Keep reading to see the priciest (and cheapest!) places to get your Big Mac- and how we determined this.
If you make it a value meal it will set you back $5.99.īut how much you pay will vary dramatically based on where you live. While you can’t get a degree in Burgernomics, you can see the difference when looking at menu prices across the country. The cost of a Big Mac has become more than just how much your favorite burger at McDonald’s costs and transcended to a whole economic theory.