Tuesday, August 18, 2015

Can You Afford A Big Mac Meal Date on a $31,000 a Year Salary?

The Los Angeles City Council recently voted in a $15 an hour minimum wage by 2020.  Therefore, the lowest paid McDonald's worker will be paid that wage; but, because nearly all McDonald's employees make less than $15 an hour, all workers should, and probably will, get a similar increase.

Back in 2013 and based on 2012 prices, it was determined that the average  Big Mac would jump $1.28 if the minimum wage increased from $7.25 to $15.  This was based on the average price of a Bic Mac at $4.20.  Mathematically, this means a  30.4% increase in price.  It also means a roughly 4% increase  for every dollar of minimum wage increase, and this is before any other inflationary costs for food, utilities, etc. are factored in.

 Of course,nobody just buys a Big Mac.  They usually buy a "Meal" which includes the burger, fries, and Coke.  Today, with a $9 minimum wage in California, the average "Meal" costs $7.67.  Now, if I'm a single guy and the minimum wage is now $15 or around $31,000 a year, my after tax income will be about $12/hour.  Total taxes being roughly 20%. With the increase to $15, that once $7.67 "Meal" should be about 24% higher; assuming an increase of $6 from the current $9.  Thus, to treat myself and a friend, it will now cost $20.73; assuming a 9% sales tax in Los Angeles.

Therefore, I would have to work almost 2 hours in order to pay for this simple date.  It's no wonder their losing business.  No one can afford to eat there anymore.  Especially millennials with their incomes around $37,600.  A $15 minimum wage just may be the death knell for McDonald's and the rest of the fast food industry.  A primary source of minimum wage jobs in this country.


Los Angeles is the largest city in America with a $15 minimum wage: http://money.cnn.com/2015/06/14/news/economy/los-angeles-minimum-wage-15-garcetti/

McDonald's Hourly Wages By Job Type: http://www.glassdoor.com/Hourly-Pay/McDonald-s-Hourly-Pay-E432.htm

Taxes on a Worker Making $30,000 in California: http://www.taxformcalculator.com/tax/30000.html

2012 Big Mac Price: http://big-mac-index.findthedata.com/

About that 68-Cent $1.28 Big Mac Price Increase: https://www.minimumwage.com/2013/07/about-that-68-cent-big-mac-price-increase/

McDonald's Fast Food Prices: http://www.fastfoodmenuprices.com/mcdonalds-prices/

Average millennial income: https://www.google.com/search?q=average+millenial+income&ie=utf-8&oe=utf-8

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