When fast food workers strike for higher wages, one common argument used against an increase is the impact it would ostensibly have on prices. But during a recent internal conference call, a Jack In The Box corporate executive said the impact on menu prices from the pending establishment of a $10 minimum wage in California would be minimal:
In our 2015 numbers, we've assumed that we will take some price to offset the California minimum wage, which we estimate to be about 1.4%, this is just for California restaurants, and a little less than 1% if we take it across the entire system.
In other words, you'll have to shell out roughly three extra pennies for that ten-piece order of chicken nuggets that now cost $2.50, which (at least in California) will be more than offset by the $2-per-hour boost in the currently $8 minimum wage.
Other restaurants have come up with similar numbers. Even The Cheesecake Factory, which has 20% of their locations in California, only increased prices by 2%, bringing the cost of a $16 meal up to $16.32
These numbers seem to confirm the findings of a study by the Center for Economic and Policy Research, which concluded that a higher minimum wage actually "yields significant cost savings to employers," by reducing employee turnover.
Via Opposing Views
This article has been edited to amend a typo and an error that caused some confusion.