Study: Union-Backed Fast Food Proposal Could Cost Half a Million Jobs

Think tank suggests $15 minimum wage would cost jobs

Protesters outside a McDonald's / AP
December 5, 2013

Hourly wage increases advocated by labor groups could kill more than 450,000 jobs, according to a new report.

Union-backed labor groups, including Fast Food Forward and Fight for 15, are staging nationwide walk-outs and demonstrations at fast food chains across the country calling for starting wages of $15 per hour.

Their success could spell economic disaster for nearly 20 percent of the nation’s 2.5 million fast food workers, according to an analysis from the Employment Policies Institute.

"We find that roughly 460,000 jobs would be lost in the fast food industry as a consequence of a $15 minimum wage," the EPI report found. "This is a conservative estimate because it only includes employment loss among those who hold a fast food job as their primary employment. Including those who work in the industry as a second job would increase the estimates."

The group estimated that employment falls 3 percent for every 10 percent increase in labor costs. The $15 wage is more than double the federal minimum wage of $7.25—and nearly 50 percent higher than the $10.10 wage proposed by congressional Democrats.

EPI warned that the doubling of wages would lead the restaurants to "replace jobs with less costly, automated alternatives—including self-service ordering kiosks and even automatic burger makers."

"These fast food protestors can either have a $15 minimum wage, or they can have the same number of jobs in the restaurant industry. But they can’t have both," EPI spokesman Michael Saltsman said.

Protesters are expected to demonstrate in front of more than 100 restaurants nationwide, including McDonald’s, Burger King, Taco Bell, KFC, Pizza Hut, Domino’s, Papa John’s, and Subway. The fast food movement has earned the support of other liberal groups.

"It's time to pay your workers $15 an hour so they can make ends meet and Americans can stop paying for the hidden costs of poverty wages," says in an online petition signed by nearly 50,000 people as of Wednesday afternoon. held demonstrations in New York City on Wednesday to support the movement and put further pressure on businesses to adopt the wage hikes.

The liberal rabble-rousers may have been better off picking a different location, according to EPI. New York is expected to lose more than 23,600 jobs if the $15 wage goes into effect, trailing only Texas and California, which combine for nearly 100,000 lost jobs.

"Just over one-third of those lost jobs would be concentrated in five states: California, New York, Texas, Florida, and Pennsylvania," the report found.

Fast Food Forward and Fight for 15 expect thousands of protesters, many of whom critics say are not actual fast food employees, to attend Thursday’s protests.

"Just like the recent Walmart protests, today’s strikes are a great example of labor’s desperation: Faced with declining numbers, they’re trying to create the appearance of grassroots support at businesses where employees plainly have no interest in joining a union," Saltsman said.

Published under: Unions