Franchises

What Raising Workers' Pay Would Mean for Franchise Owners, Consumers

2 min read
Opinions expressed by Entrepreneur contributors are their own.

Franchise owners may have a lot to lose if striking fast-food workers get their way.

The growing movement among low-wage fast-food and retail workers is gaining momentum today, with protesters in cities across the U.S. demanding an increase from the current $7.25 an hour minimum wage to a $15 an hour living wage.

The International Franchise Association (IFA) and the National Retail Federation (NRF) have come out against the wage hike. "Mandating increased wages would lead to higher prices for consumers, lower foot traffic and sales for franchise owners, and ultimately, lost jobs and opportunities for employees to become managers or franchise owners," said IFA president Steve Caldeira in a statement released today. Meanwhile, the NRF called today's strikes a "publicity stunt" orchestrated by labor unions and asserted "retail and restaurant companies pay competitive wages and many offer additional benefits."

Related: 5 Reasons the Fast-Food Worker Protests Are Off Base

For consumers, the impact of the striking workers' demands on consumer prices has been hotly debated. Some experts speculate that the cost of a Big Mac would rise anywhere from just 22 cents to nearly double the current price (around $4.50) if the minimum wage is raised to $15 an hour. Others point out the implications for franchise owners and the potential that jobs would be lost to automation.

The latest round of protests comes after the fast-food worker strikes that took place in July in seven U.S. cities including New York, Chicago and Detroit. The movement for higher wages began in November in New York, when about 200 restaurant workers went on strike in a one-day protest.

Several protests have already taken place today in Detroit, Atlanta, New Orleans, New York, Chicago and Los Angeles, as well as smaller cities like Columbia, Mo., and Raleigh, N.C., with demonstrations planned for an estimated 35 to 50 U.S. cities in total. Retail workers from Macy's, Sears and Victoria's Secret also plan to strike today as the movement widens scope to include other traditionally low-wage jobs. A full time minimum-wage worker takes home $15,080 a year, the poverty line in the U.S. is $18,480 for a family of three.

Related: What the Crowdfunding Boom Means for Franchising

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