Australian McDonald’s Workers Make A Minimum Of $14.50 As Doors Remain Open

McDonald’s workers in Australia make $14.50 per hour and will soon earn a pay raise. Despite rates double that of US workers, franchise owners have managed to keep the lights on and even turn a profit.

Last week, fast food workers around the United States walked out on their jobs while demanding a pay raise to $15 per hour. Franchise owners at various fast food chains claimed at the time that they couldn’t continue to operate if they more than doubled worker rates.

So how are franchise owners down under turning a profit? Basically they have increased the cost of food. Worldwide 45 percent of a Big Mac’s cost goes to pay workers, and, in the US, that number is believed to be lower. To make up for costs, in Australia the cost of a Big Mac is simply higher.

The chart below by Princeton economist Orley Ashenfelter shows the cost of a Big Mac across different regions.

Even with a much higher wage level, the Big Mac in Western Europe isn’t that much more expensive than that of a US-based franchise.

The Economist notes that McDonald’s has increased the cost of a Big Mac anywhere from 6 cents to 70 cents at US locations over the past two years. Not increasing during that same time was worker wages.

It has been suggested that a Big Mac would cost about $1 more if workers were to receive a fair wage.

In Australia, McDonald’s and other companies are helped along by laws that allow teenagers to earn less money. In the United States, a minimum wage change would affect everyone and lead to higher costs. Should the US really want to push for a higher adult-living wage, new laws to allow for lower teen pay could have positive effects. In Australia, a 16-year-old McDonald’s worker earns around $8-per-hour.

Recent research has also found that McDonald’s locations overseas have less workers per location but higher levels of production per worker.

Essentially, you pay less people to do the same job and pay them more so they want to get the work done.

Can McDonald’s in the United States survive if the 2013 Minimum Wage Act pushes wages to more than $10 in the US by 2015? That answer has already been proven.