Fast Food strike

There are strikes going on around the country this week at Fast Food Restaurants. The employees are demanding a living wage and I am with them all the way. This has been on my mind since the low pay at stores like Wal-Mart was brought to the public’s attention. This is a something that should be on the minds of all working Americans. The basic questions is would you, as a consumer, be willing to pay more to support higher wages. How much more, can be determined with some straight forward calculations. In general the cost in the fast food industry can be broken down into the following three categories: One-third for materials, one- third for expenses and one-third for labor. If a burger cost $3 then one dollar is for labor so if we double the wages from $8 per hour to $16 per hour the burger would cost $4. For most people working full time this would not be a doubling of their salary, since they qualify for government benefits that would be reduced if they earned more. Many of these full time employees, especially the ones with children, receive and extra $10,000 per year from the government in the form of child tax credit and earned income credit. With salaries going to $16 they would likely lose about half of this. I do not often eat out but I am curious as to what would happen if Burger Kind charged $4 and McDonalds charge $3. Would Burger King go out of business? Is there a way to convince all fast food placed to double the salaries? As the owner of a fast food place I would be delighted to increase salaries if I knew my profits would not be adversely affected and if all places raised pay then it would be a wash. The only ones who would be hurt would be the customer. When viewing this from a macro-economic picture be advised that if every business doubled everyone’s salary then the price of everything would increase accordingly.