Let’s just walk through a few logical steps that would follow such an idiotic ploy.
1. McDonald’s doubles everyone’s salary by raising all prices by 17%. Burger flippers are now earning $15 per hour.
2. The price of virtually all McDonald’s items rise. This means more money out of the pockets of all who shop at McDonalds. If a family of four comes in for four Big Macs, fries and some drinks the price increase could equal somewhere around $4.50 or more. Not small change for many people.
3. Workers at other fast food companies quickly abandon their jobs to travel across town so they can work for twice the bucks at McDonald’s!
4. Wendy’s, Burger King, Popeye’s and other culinary castles quickly raise their hourly wages to meet the McDonald’s challenge! Prices go up at these fast food emporiums as well! Now no family can go out for a burger without paying more.
5. Minimum wage workers in other areas, principally retail, learn of the higher wages that can be had by memorizing the line “Would you like French fries with that?” They quit their jobs to search for the fast-food worker’s paradise.
6. In order to keep employees working in retail establishments employers have to effectively double their wages, just as McDonald’s and the rest of the fast-food industry has done. This, of course, means that prices of virtually everything that is sold in retail stores will have to be raised. Now the family that started out paying an extra $4.50 for a meal at McDonalds is experiencing a similar price increase on pretty much everything they buy at the retail level.
7. Many unions have contracts with employers that are based on a multiple of the prevailing minimum wage. If the minimum wage goes up, union salaries go up by a similar percentage. You can only imagine what would happen to some union wages under this scenario, and the resulting price increases to compensate for these increased wages would be incredible. The price increase on a union-made automobile would be substantial.
8. So, as a result of McDonald’s playing this undergrad student’s silly game we find retail prices for basic consumer goods increasing pretty much across the board. The minimum wage workers who benefitted from this ruse soon find themselves with pretty much the same purchasing power they had before.
9. To top this scenario off, some businesses discover that the economics of the marketplace simply will not allow them to raise their prices enough to cover the wage demands brought on by this scenario, and they simply go out of business. Who knows how many jobs will be lost.
All this because some undergrad student at Kansas comes up with a spectacularly brain-dead idea that gets published on The Huffington Post and then drooled over by ignoranus Democrats and assorted leftists who couldn’t tell the difference between a P&L statement and a valet parking ticket.
Ok … as you were.
In Honor of His 103rd Birthday, Here Are The 20 Best Quotes From The Late, Great Milton Friedman | John Hawkins