Minimum wage

Starbucks CEO Howard Schultz announced that he would invest $35,000,000 in a plan to help employees with college tuition. They sell 600,000 cups of coffee per day in the USA and if they raise the price by 15 cents per cup this will bring in over $30,000,000. They recently raised the price by this amount but said it was not because of the tuition plan. This is an excellent way to pay for employee benefits including wages. Let us carry this over to McDonalds and find out how much we would have to increase the cost of a hamburger to double the wages of employees to $16 dollars per hour. McDonalds has 700,000 employees and if they all work 2,000 hours per year equals 1.4 billion hours. If they get an $8 per hour raise that will cost 11.2 billion dollars. They sell 23 billion hamburgers per year in the United States, so they would have to raise the price of each hamburger by 50 cents. Just do it. Once a McDonald’s employee starts to earn $16 per hour some may think of that as a career but that is their choice. In most cases they will not double their take home pay and they should be aware of that. A family of four with a stay at home mom and a dad who earns $16,000 per year ($8 per hour) gets an additional $12,000 per year from the government primarily from the Earned Income Credit and the Child Tax Credit. If they double their salary, these benefits will be reduced by about $2,000. This means they would earn $32,000 in wages plus $10,000 in government benefits for a total of $42,000. The only deductions would be $2,400 for payroll tax since they pay no income tax. This equates to a take home pay of $40,000 and the poverty level for a family of four is $24,000. Like I said, just do it.