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Profitable Fast Food Restaurants Already Do Pay $15 an Hour in Other Countries

David Callahan

Critics of the fast-food worker strikes don't just make the mistake of relying on industry-backed research to argue that higher wages are unaffordable (see Jillian Kay Melchior's slanted and shallow piece in NRO) and ignore the real-live examples of U.S. states that have raised their minimun wage with no adverse effects (like Washington). 

They also seem unaware of an all-important point: Which is that the leading U.S. fast-food chains already pay much higher wages -- in some cases more than $15 an hour -- to workers in countries with higher labor standards. And guess what? These overseas restaurants are still very profitable and hire plenty of new workers. 

Australia is a good example, as Jordan Weissmann, pointed out in the Atlantic recently. The minimum wage Down Under has been far higher than the U.S.'s for years. It's currently the equivalent of $14.25 an hour, but many McDonald's workers make more than that. McDonald's opened its first restaurant in Australia in 1971. It now has more than 900 outlets there. Pretty good growth, I'd say. 

France is another example. That country's minimum wage is $12 an hour, but additional worker benefits push the real number even higher. 

So how's the fast-food chain been doing in France? Has it been stumbling along, with restaurants not willing to hire workers -- as armchair theorists like Jillian Kay Melchior would imagine? Are the Golden Arches doomed under social democracy? 

I'm sure a great many French traditionalists wish that were so. In fact, though, McDonald's has over 1,200 restaurants in France and is actually the largest private sector employer in that country. McDonald's didn't open its first restaurant in France until 1979, so we're talking about an average of over 30 new McDonald's restaurants opening every year for the past three decades. 

Beyond a higher minimum wage, McDonald's workers in France enjoy a number of protections that business tends to fiercely resist here and France's labor regulations are regularly depicted as "job killing." (Of course, also, French workers all have health insurance through that country's universal coverage.)

Yet none of this has stopped McDonald's from running a thriving business in France. To be sure, higher labor costs are passed along to consumers, but overall, McDonald's European operations are more profitable than its restaurants in the United States. 

None of this means that doubling the minimum wage overnight in the U.S. wouldn't lead to jobs losses for fast-food restaurants. Certainly there would be disruptions. But let's stop pretending that big fast-food chains are operating by the slimmest of margins and will start shedding workers if they are forced to substantially raise wages.