McDonald's can afford to pay its workers a living wage without sacrificing any of its low menu prices, according to a new study provided to The Huffington Post by a University of Kansas student.
Doubling the salaries and benefits of all McDonald's employees -- from workers earning the federal minimum wage of $7.25 per hour to CEO Donald Thompson, whose 2012 compensation totaled $8.75 million -- would cause the price of a Big Mac to increase just 68 cents, from $3.99 to $4.67, Arnobio Morelix told HuffPost. In addition, every item on the Dollar Menu would go up by 17 cents.
McDonald's declined a request to comment from The Huffington Post.
This research comes as fast-food workers across the country strike for a $15 per hour minimum wage. Workers are also protesting for the right to unionize without fear of retaliation. Protesters are holding strikes in seven cities over a four-day period, according to Salon.
Morelix looked at McDonald's 2012 annual report and discovered that only 17.1 percent of the fast-food giant's revenue goes toward salaries and benefits. In other words, for every dollar McDonald's earns, a little more than 17 cents goes toward the income and benefits of its more than 500,000 U.S. employees. Thus, if McDonald's executives wanted to double the salaries of its employees and keep profits and other expenses the same, it would need to increase prices by just 17 cents per dollar, according to Morelix.
After HuffPost published this story on Monday, Morelix updated his research to reflect that his 17.1 percent figure only takes into account the payroll & employee benefits of McDonald's company-operated stores and excludes franchisee-run stores.
McDonald's franchises make up more than 80 percent of McDonald's restaurants worldwide and their exclusion from Morelix's analysis has left it open to criticism. University of Kansas School of Business economics professor George Bittlingmayer told Forbes that Morelix's model was “a little bit of a leap of faith.”
Still, National Employment Law Project Policy Analyst Jack Temple said in an interview with HuffPost that Morelix's findings are "consistent" with what he has seen in previous research. A 2012 study from the University of California, Berkeley, for example, found that a federal minimum wage increase to $9.80 per-hour would cost American households just 10 cents more per day on average for food.
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