Yesterday, New York Gov. Andrew Cuomo announced he would reconvene the state's wage board to lead a review of hourly pay rates in the state's fast-food industry. Just a few months ago, Cuomo accepted the same board's recommendation to increase the tipped minimum wage.
Announcing the move via an op-ed in the New York Times, Cuomo noted the state is basically subsidizing the low wages that fast-food workers receive, estimating their underpayment costs the state $700 million a year in assistance. And all the while, Cuomo said, their corporate employers are by and large thriving.
Fast-food companies' main argument against raising worker wages is that doing so would drive up the cost of burgers and fries, and subsequently limit employment opportunities. But Cuomo says that trend hasn't been borne out overseas.
Is he right?
Let's see. We took the price of Big Macs for all the countries with minimum wages higher than the U.S.'s, and then plotted them against those minimum wages.
The graph below shows, at best, a weak correlation between a higher minimum wage and a higher price of two all-beef patties, with the exception of Denmark—the yellow dot on the top right—where the country's powerful unions have negotiated an average minimum wage of $20. (Big Macs are more expensive in the U.S. on average because there is relatively more demand for them.)
Data from big-mac-min-wage-index.silk.co
This adds to results found by former White House economic adviser Alan Krueger, who found increasing the minimum wage at New Jersey and Pennsylvania fast-food restaurants had a negligible impact on employment (by way of lack of customers sensitivity to new prices).
Krueger bemoaned to Bloomberg News recently that voters in states around the country have signaled they are ready for higher wages, but that the message hasn't gotten through to Washington.
"The American people spoke pretty clearly, and their representatives haven't followed through," he said.
Rob covers business, economics and the environment for Fusion. He previously worked at Business Insider. He grew up in Chicago.