Bare Minimum

08.01.13

The McPoverty Calculator

Paying cents more for a burger could mean big wage hikes for fast-food workers, many of whom live in poverty. So how much more would you pay for a Big Mac?

How much more would you pay for a Big Mac if you knew the person serving it to you would be able to raise her children out of poverty?

This week has seen mass protests and job walk-outs across the fast-food industry, with employees from McDonald’s to Taco Bell demanding higher wages and better treatment. Some labor economists have said that a slight increase in the price of a burger could result in a big jump in wages—enough to raise the fortunes of thousands of $7.25-an-hour employees. (Even working 40 hours a week, 52 weeks a year, a minimum-wage worker only takes home $15,080 a year, well below the poverty line of $18,480 for a family of three.)

But if the fast-food giants agreed to do this, would consumers bite?

To find out, we consulted with economists Jeannette Wicks-Lim and Robert Pollin who have studied the relationship between wage increases in the fast-food industry and the cost of doing business. Using their formula, we created a Big Mac calculator that lets you see how your extra cents could translate into real-life wages. Give it a try!

Notes: Figures are estimates based on research conducted by Jeannette Wicks-Lim and Robert Pollin, using data for the average fast-food restaurant, not McDonald’s specifically. Calculations were made assuming the federal minimum wage of $7.25 an hour, which many, though not all, workers earn in this industry. The average price of a Big Mac comes from The Economist’s most recent Big Mac Index. And finally, there is no guarantee that all or some of the increased sales revenue from a price hike would go toward the lowest-paid workers.