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How will Higher Wages for Staff Affect the Fast-Food Sector? Economists Weigh in

Deciphering Change as an Economist Uncovers the Impact of Fast Food Employee Wage Increase
Cover Image Source: Unsplash|Photo by  Pixzolo Photography
Cover Image Source: Unsplash|Photo by Pixzolo Photography

The fast-food industry stands as a cornerstone of modern consumer culture, offering convenient and affordable dining options to millions worldwide. Fast food outlets are not just limited to serving burgers and pizzas to their customers but they also reflect a collective shift in lifestyle choices and dining preferences. But with the drastic change in tipping culture across American cities, consumers as well as industry experts, have started a conversation about the wages of employees at fast-food chains, and these discussions are fueled by calls for fair compensation and improved working conditions, instead of disproportionate reliance on additional income from tips. The debate revolves around how workers are the ones that make the restaurant survive but are still not paid better wages and due to the stagnant working environment, their growth is hampered. This is why several economists have been studying what would happen if the workforce at fast-food chains got fair wages, and they have started looking into a diverse range of factors as part of research. These include how much it costs to run a restaurant, how much people pay for food, how many people get hired, and how the economy overall could be affected.

Image Source: Unsplash|Photo by Jesson Mata
Image Source: Unsplash|Photo by Jesson Mata

Fast food wage workers are often paid low wages due to a variety of factors. Just like every industry, fast food companies also want to make as much money as possible and hence they cut off the workers' wages making it minimum. Another reason is that fast food chains have a notion that their staff doesn't need much training and education in order to work in the outlets. Therefore, the companies feel like they are not required to pay workers more to get them to work there. And if such changes happen, workers suffer as they don't have solid groups to support and negotiate for better pay. The compensation is also affected by the location where workers work and with living costs going high and companies focusing on cost-cutting, there are not many jobs in the food industry. 


Every time people enter a fast food outlet they want their orders to be delivered quickly at an affordable price, but nobody thinks about how the staff serving them is affected by the pressure with minimal wages. Recently, it was announced that in California, fast food chain staff will be paid $20 per hour. Economist Professor Alin Gin expressed his opinions saying, "That'll help them in terms of dealing with the high cost of living that we have here in San Diego and in the rest of California". He further added, "Restaurants might respond by boosting prices. I've seen estimates where it might increase fast-food prices by about 5%". 


Following the decision, the Service Employees International Union took it Twitter by comparing the increased wage of fast-food workers with that of the outlet's CEO. The post mentioned several popular outlets with per-hour wages for the CEOs that shocked netizens.