![]() The federal minimum wage of $7.25 was last raised in 2009. restaurant workers a more than 10% raise, paying at least $1 an hour more than the local minimum wage. In April announced plans to give its U.S. Los Angeles Mayor Eric Garcetti suggested that his city’s recent decision to increase the minimum wage to $15 an hour over the next five years will lift 600,000 L.A.-area wage earners out of poverty, according to a MarketWatch article. Purdue’s study suggests that the cost to hire an hourly line position is $1,500 - a cost that covers recruitment, selection, training and vacancy costs, which may entail overtime pay. School of Hospitality and Tourism Management at Purdue University The following chart shows how the math works out: The data also assumes the median amount of sales generated per employee was $69,644 to generate $626,796 in sales.Ī 4% price increase would be needed to make up the difference in salary if employees were paid $15 an hour. ![]() To calculate the data, the study used median data from the National Restaurant Association and Deloitte & Touche, finding limited-service restaurants employ a median of 9 employees. “We just wanted to know how much they would go up if you raise pay.” Richard Ghiselli, Head of the School of Hospitality & Tourism Management at Purdue University. ![]() If fast-food workers received $22 per hour (a massive 203% pay raise) - which is the average wage for Americans in the private industry, according to the Bureau of Labor Statistics - restaurant prices would rise 25%.
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