Bringing the minimum wage back up to the buying power it had in 1968 would more than quadruple the price of fast food, according to Rep. Markwayne Mullin (R-OK). When a constituent asked Mullin for his take on the push to raise the minimum wage to $10 an hour at an Afton, Oklahoma town hall meeting last Thursday, Mullin responded with a question of his own: “You guys wanna pay $20 for a hamburger at McDonald’s?”
“If you wanna increase it, that’s great, but what you’re gonna do is punish everybody along the way,” Mullin elaborated. ThinkProgress attended the meeting and recorded the exchange:
Mullin’s hyperbole doesn’t hold up to the evidence. First, bringing the minimum wage up from $7.25 to $10 per hour would barely be enough to match the buying power the federal wage floor provided 45 years ago. Second, McDonald’s signature Big Mac retails for $4.56 today. Not even the harshest opponents of the minimum wage would argue a 38 percent increase in wages would force a company to quadruple its prices. Besides, McDonald’s charges what the market will bear, not a price that’s fixed to its labor costs.
That’s why McDonald’s makes a tidy profit in places like Australia, where the minimum wage is $14.50, and France, where employers must pay at least $12 per hour. Australians are paying exactly 6 cents more per Big Mac than Americans. The French hamburger enthusiast faces a full 10-cent gouge over U.S. prices.
Similar dynamics are at play with WinCo, a grocery chain that offers pay and benefits far above WalMart’s yet charges lower prices than the notorious low-wage retailer. Opponents of the minimum wage can find some research to support their claim that raising the wage floor hurts the job market, though there is plenty of evidence to the contrary and the matter is far from settled among economists. But the sticker-shock argument Mullin made to his constituents doesn’t make any sense.
Furthermore, focusing solely on the business side of the equation ignores the broader economic benefits of higher wages. It isn’t just outrageous that McDonald’s own website advising employees on how to budget recommends getting a second full-time job and going without heat. It’s also a reflection of how poverty wages undermine the consumer spending power that drives growth. A $9 minimum wage would add $48 billion in spending and 0.3 percentage points of gross domestic product growth, according to researchers at the Chicago Federal Reserve. A $10 minimum wage would lift 6 million Americans out of poverty.
As low-wage workers continue to strike for livable wages in cities across the country, and low-wage jobs continue to be the primary area of growth in the gradual recovery, all the evidence suggests a higher minimum wage would benefit everyone, including people who eat hamburgers.