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.”