Burger King Founder Predicts Wage Hike Would End the 'Dollar Menu' Era
Will increasing employee pay mean the end of the dollar menu? This fast-food founder thinks so.
Burger King co-founder David Edgerton told TIME magazine if fast-food workers and activists succeed in raising the minimum wage to $15, the industry is going to undergo some serious changes.
"You’re not going to get these dollar hamburgers anymore that both Burger King and McDonald’s had," Edgerton, who is today 87 years old and no longer affiliated with the fast-food giant, told TIME. "I see a lot of $10 hamburgers arriving on the scene."
Edgerton believes that inexpensive, "quick and dirty" fast-food joints will fade away as labor costs grow, forcing food prices to increase. If he was still leading Burger King, he says that he would try to "educate" employees on the big picture of running a fast-food franchise. According to Edgerton, most workers believe that executives are "making all kind of money" to the employees' detriment – something he says is not true.
Still, employees and activists argue that a wage hike is necessary, pointing to facts such as that about 20 percent of all restaurant workers live in poverty and that, as a group, fast-food workers receive more than $9 billion per year in welfare. Wednesday kicked off the latest round of "Fight for $15" protests, with workers in more than 200 cities joining marches or protests.
While the national minimum wage is still $7.25, the fast-food industry is already looking toward swapping out the dollar menu with more expensive and higher-quality offerings. For example, McDonald's launched Sirloin Burgers, priced at around $5, earlier in April and has been rolling out the premium burger 'Create Your Taste' customizable platform. Meanwhile, chains with higher food prices built into their business model such as Shake Shack and Chipotle, are flying high. One way or another, it looks like the dollar menu burger is going to have to adapt or perish.
Kate Taylor is a reporter at Business Insider. She was previously a reporter at Entrepreneur. Get in touch with tips and feedback on Twitter at @Kate_H_Taylor.