A couple years ago, the radical idea of paying $15 wages was proposed.
And it was often ridiculed, because it would …(gasp!!) force the restaurants to increase their prices.*
And now we see signs everywhere saying “help wanted $15”.
But has anybody noticed any price changes on the menu?
We have some professional accountants/economists on this site, I assume. Has anybody here read the financial statements of the big chains and seen how the new wages are affecting profits?
*( which would lead to fewer sales and causing layoffs., thus hurting those poor people who should be grateful for their $8 jobs, so shut up and get back to work, kid).
I’ve seen increases in prices, but I think it is a lot more than wages. Food itself has gone up quite a bit in the last 18 months. The Pandemic has causes a myriad of issues.
As to studies on it, seems a little early to expect a good study on the subject.
The US Bureau of Labor Statistics shows that in my area of Southern California, “food away from home” prices are 4.1% higher from Sept. 2020 to Sept. 2021. When you look at the increase in “at home proteins” you start thinking that 10% more for your cheeseburger at McKingdomCastle is a bargain.
Heh, I was reading the OP and thinking, hey I know a minuscule crumb of info about this, cause it’s relevant to my relationship with the ex right now. I get to your post and ya beat me to it.
What I noticed after minimum wages went up was that the workers seem to be worked harder, resulting in many more ordering/fulfilling errors. Hours at some fast food places went down. Also, the immediate result at Tim Hortons was that they lowered the quality of the food. I don’t go there any more.
Another result was that all the McDonalds in food courts went to automated ordering kiosks.
McDonald’s has supposedly announced they’re raising prices, but I didn’t see numbers or a link to an announcement. Lower margins are at least partially offset by increased volume.
I’ve noticed that prices have gone up at restaurants but that hike in my experience tracks with higher food prices at grocery stores and elsewhere. People who want to make minimum wage a political boogey man will ignore that.
Presumably that was in 2017, which was the last time minimum wage went up here in Alberta. I was in Utah at the time, and McD started implementing the kiosks there at the same time… but the minimum wage had not just gone up. So no, it’s unlikely that their switch to kiosks was due to minimum wage increasing.
That article isn’t an economic model, it’s a survey of fast-food managers and what they actually did to respond to minimum-wage hikes:
That’s absolutely consistent with both economic theory and other studies that have measured the effects of minimum wage increases. You get a combination of higher prices, fewer hours per employee, fewer employees, and the ones you retain are worked harder to bring their productivity up to match the new wage expectation.
If you accept that the fast food industry is low margin, than you can’t increase costs in any dimension without affecting one of the above. There are no free lunches.
Here’s an article from pre Covid 2019 and yes, they’ve definitely been out there even before fight for 15 and Occupy Wall Street was a thing.
Kiosks do have an advantage as they can be multilingual. It’ll be hard for many fast food restaurants to go completely cashless but a pay at the kiosk with card can help reduce the amount of cash the restaurant has to deal with.
McDonalds was responding to the push for higher minimum wages across North America. They aren’t going to build kiosks just for one small province,
The fact is, McDonalds cut its work force in half in the space of three years - not by closing restaurants, but through labor efficiency improvements and automation. This coincided with the national campaigns to raise the federal minimum wage (“The fight for $15”).
Purely anecdotally, I went to Jack n the box today and a jumbo jack was $4.50 for just the sandwich. A quick Google shows it around $3 in 2021 around here.
Following American trends, pretty much every fast food place in Canada used to have a “value menu” ten years ago. Those have mostly disappeared after minimum wage raises (but not necessarily due to that). Even at Taco Bell, etc.
Now a lot of places have stopped combos where you basically got the drink for almost nothing. They charge for each item or include only basic fries in the combo with an up charge for almost anything else.
If you’re going to pay $13 for a fast food meal you are not far off getting something far better and more nutritious too. Minus the convenience factor, though.
This is important. Fast food places have hard limits on how much they can charge, and it’s getting worse for them as traditional restaurants embrace home delivery and the ‘convenience’ value diminishes. If prices go up relative to other, better options, the entire fast food industry could collapse or shrink dramatically.
Not much sense of that happening during Covid though. Many did very well. Some of their customers are not very price sensitive, those that are might use coupons or go on what were Toonie Tuesday or Whopper Wednesday.
Still, given time there are many better options. I live in a city a few hours from a big city. People are being priced out of Big City and are now opening up ethnic restaurants here - good, cheap, nutritious — and suddenly all over the place.
A lot of grocery stores turned into “Boston Markets” selling somewhat fresh ready meals.and sushi. Everyone is seemingly selling better meals - apart from the gas station sandwiches and Pepperettes.
A few restaurants I frequent have gone up recently, though not dramatically. My typical coffee at Starbucks went up 32 cents, for example.
What I’m seeing more of is reduced operating hours - restaurants that were open 24 hours are closing overnight, and Krogers is opening later and closing earlier.
One survey reports that around 74 pct of business would be affected because they’re too small.
As an aside, one can also look at this phenomenon in light of the plight of ave. and min. wage earners worldwide. For example, consider the ff. data from Numbeo that can be used to make quick comparisons of countries:
The est. monthly cost for a family of four (without rent):