#FastFoodGlobal: Potential affects of higher pay

May 9, 2014

This week I read that fast food workers across the country are going on strike with hopes to raise their pay wage.  The protests are estimated to occur in 150 U.S. cities and 30 countries on Thursday May 15, 2014.  The workers are asking to be paid a living wage of $15 an hour by their employers.  The group “Fast Food Forward” is a union supported group that is also asking for the right to unionize themselves, receive better benefits, and more hours.

Pay raises are great for the workers, but then there’s the question of where the money comes from to pay them.  This pay hike would most likely be seen in an increase in prices of fast food restaurants.  The customer would be the one to feel the effect of such a change.  Companies are probably weary of increasing prices because they don’t want to lose price-sensitive customers that frequent their restaurants.  Perhaps a 15¢ increase in price could make the difference between customers choosing one fast food venue over another.

Labor costs are a major expense for companies, and have a bigger impact than we as consumers probably realize.  The increase in wages for workers could markedly increase their quality of life, which is definitely a plus, seeing as at a pay of $9 an hour a full time worker is still under the federal poverty line.  But there’s another side to this coin.  Pay raises could result in cut hours and lay offs of workers.  Additionally, higher pay could mean replacing workers with automated machines like the self-checkout registers at the grocery store.

When faced with both sets of impacts, I have trouble making a decision of which path is best.  To raise the pay or to keep it where it is?  There are pro’s and con’s to each choice.  While the workers want higher pay rates, are they willing to have them to result in lay offs throughout the industry?

 

Written by Michaela Lies, writing intern at Three Rivers Community Foundation and student at Washington & Jefferson College.