One of the biggest fears of professional organizations/companies or business owners; is what would happen if a change of minimum wages is experienced in the business? How will it affect the employee and vocation performance? Well, there is only one way to figure out the answers to these questions. But first, let me ask you, have you ever been employed and wondered what your minimum compensation should be from your employer? In this article, I will explain to you some of the key effects of increased minimum wages on fast-food industries with key stats and trends.
To be honest, all of us regularly enjoy fast foods; be it your favorite beverage or snack. We tend to enjoy a specific ‘cheat meal’ to take a break from home-cooked food. Indeed, research studies prove that in the United States, the fast-food industry is approximately worth over $270 billion and $570 billion globally as recorded in 2021. Surprisingly, these numbers are set to sky-rocket as the years’ progress. But following the ongoing COVID-19 pandemic, the fast food industry trends have shifted causing reduced sales in the last 2-3 years; as a result of few order placements to embrace social distancing.
Why is it necessary to increase the minimum wage?
There are different reasons a business or organization may wish to increase the minimum wages of employees. All strategies are summed up to improve economic growth. First, increased minimum wages improve employee productivity and performance appraisal. When workers are aware that they are paid fair wages, they become motivated hence embracing a consistent work ethic. Secondly, employee turnover is reduced hence a decrease in training and recruiting costs. Lastly, the organization records no or minimum absenteeism due to self-motivation.
Increased minimum wages in Fast-food industries
According to the U.S Bureau of Labor Statistics, an increase of minimum wage from $7.25 to $15.00 per hour was suggested by policymakers for economic purposes; especially to fit fast-food industry employees. One of the main effects of increased minimum wages in fast-food industries is the increment in product and services prices. As we all know, the reason why we love fast-foods is that they are relatively cheaper. But when a food company decides to increase the minimum wage, consumers are forced to pay more for a product to sustain the business.
Also, minimum wage increase results in a reduced labor force and loss of jobs. Most fast-food organizations comprise of different employees who perform various services such as serving and packing. For example, due to the rise of technology and software development, companies like Mac Donald’s who possess productive fast food industry trends, has developed automated ordering strategy. This involves different checkpoints on the restaurants where consumers just speak out the order and it automatically gets transferred to the packaging team. As a result, technology is used on behalf of employees to provide fair wages to short-listed workers.
So, increment of minimum wages in fast-food industries can either improve the business performance or result in economic inflation. Indeed, taking risks in business is part of the game.