Fast Food Chains Raise Prices as Wages Increase For Employees Amidst Major Debate

Fast food restaurants Chipotles and Starbucks are increasing wages for their lowest paid workers. This move comes after many of its customers have said they support raising the minimum wage for the lowest paid employees at the Starbucks and Chipotles. It also comes amidst pressure that the minimum wage paid to fast food employees is simply not enough to survive on and leads to poverty. 

Increasing the minimum wages for new employees and providing pay increases for those already working at Starbucks and Chipotles comes at a price. The two chains are increasing the prices of items on their menus to offset the additional expense of higher wages for its employees. Starbucks has already raised the price of many of its drinks by five to twenty cents. Starbucks says that the wage increases could cost the company about $140 million. That is a small amount, when you consider that the company makes billions of dollars in profits every year. Starbucks also says that as the economy expands and more job openings appear raising the minimum wage at the company will help attract and retain employees. It should be noted that Starbucks is planning on expanding aggressively in the United States and abroad, and if it cannot find and keep employees at its stores, then its policy of expansion will fail. Besides increasing wages, Starbucks also says it will provide one free food item to its employees per shift and provide tuition reimbursement for its employees if they meet criteria. 

The move to raise minimum wages and give pay raises to low paid employees is a positive sign for workers in the fast food industry, and other low paying jobs in retail and healthcare. Such wage increases should help many struggling families get out of poverty and increase their take home pay. Wages have simply not kept up with inflation. The dollar buys much less than it did 10 years ago. Yet the federal minimum wage remains at $7.25 per hour. The cost of living has increased significantly, yet wages have not. This has lead to decreased purchasing power, in other words people can’t buy as much goods as they used to with their pay. Stagnant wages also lead to poverty and a decreased standard of living. 

Many cities and states are now debating on whether they should enact legislation to raise the minimum wage in their jurisdiction. Many cities and states already have higher minimum wage laws than the paltry $7.25 an hour outlined by the federal government. San Francisco has an minimum wage of $12.25 per hour which is almost double the minimum wage at the federal level. However, many states do not have higher minimum wage laws and those that do often have a marginally higher wage.

In New York State, the state government is looking into raising the minimum wage for fast food workers and other low paid employees after a series of labor hearings found shocking testimony from fast food workers. If a major legislative or executive action is taken place in New York it could have a domino effect all over the country. This would do wonders for many workers who deserve liveable wages in today’s economy.

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Fast Food Chains Raise Prices as Wages Increase For Employees Amidst Major Debate