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The Cost of the Minimum Wage: $20 for a Burger

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The Cost of the Minimum Wage: $20 for a Burger

April 24, 2014

This week, April 23-30, is “High Road Restaurant Week” in New York City. If you are unfamiliar with it, it is probably because most people cannot afford to regularly eat $20 hamburgers at the expensive restaurants designated as “high road.” 

The Restaurant Opportunities Center is organizing the event. This worker center (a labor union in all but name and tax treatment) is rating Manhattan and Brooklyn restaurants on their employment practices, including compliance with regulations, work environment, and generous benefits. The center claims to be looking out for the best interests of low-income workers.

ROC advocates for a federal hourly minimum wage of $15. Proponents of a higher minimum wage (such as ROC) often assert that raising the wage would not greatly increase prices for customers. If ROC’s list of approved high road restaurants is any indication, this claim is false. 

The consumer watchdog ROC Exposed examined the prices and menus at the 27 Manhattan restaurants chosen by the Restaurant Opportunities Center. 

The average price for a burger and fries at these restaurants is $20.50. For that price at McDonald’s, a person could buy a Big Mac, Double Quarter Pounder with Cheese, Cheeseburger, Grilled Onion Cheddar Burger, Bacon Habanero Ranch Quarter Pounder, McDouble, Mac Snack Wrap, and a BLT Quarter Pounder—or just buy 20 McChickens.

If you are a vegetarian, you are still in for an expensive meal—the average price of a soup and salad is nearly $24.

A higher minimum wage leads to more expensive service and costlier food, which hurts low-income individuals and their families who need a cheap meal. Naturally, there is a place for such expensive restaurants. Those who embrace high wages should have the choice of dining at establishments that pay more to employees. Some people can afford the luxury of eating at a restaurant they perceive to be “socially conscious,” but many working families are more concerned with putting food on their tables. Those of us who are on limited budgets should be able to buy our $4 Big Macs, just as we prefer to buy our blue jeans from Walmart.

ROC is clearly out of touch—not just with the average American, but with the people ROC claims to represent. At hourly wages of $7.50, $10.10, or even $15, restaurant workers could rarely afford to buy $20 hamburgers for their families at a “High Road” restaurant. For parents with two children, that adds up to $80 for lunch. McDonald’s wins every time.

If ROC had its way and succeeded in raising the minimum wage to $15, it would be young people who would be hurt the most. Young workers under 25 looking to gain valuable work experience make up half of the 3.3 million Americans earning the minimum wage, according to Labor Department figures released last month. 

McDonald’s high turnover rate shows that most of its workers are using the job as a stepping stone to other careers or as a transition position between jobs. One in every eight U.S. workers has been a member of McDonald’s 750,000 person workforce. Economics21 director Diana Furchtgott-Roth entered the workforce scooping ice cream at Baskin Robbins at about $3 an hour. She never intended to have a career in ice cream.

As ridiculous as ROC’s week-long event appears, its arguments are gaining national attention. The Fair Minimum Wage Act, which would raise the federal minimum wage to $10.10 an hour, has the support of over 200 Democratic Congressmen and President Obama.

Ninety-seven percent of American workers make more than minimum wage, not out of the kindness of employers’ hearts but because this is the only way that employers can retain employees. Low-skill workers need jobs, wages, and work experience too, and if the minimum wage rises, these people will be priced out of a job. Eat at a “High Road Restaurant” this week if you want to—but only if the food tastes delicious at the right price, not to cave in to ROC’s pressure tactics.

 

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