59% of consumers support a $15 minimum wage, survey says

Dive Brief:

Fifty-nine percent of consumers support raising the federal minimum wage to $15 per hour, according to a new survey from AlixPartners. This is more than double the current federal hourly minimum wage of $7.25.
Support is even higher among millennials, with 68% of this demographic favoring the wage hike.
It is unclear whether restaurant operators would be able to support a drastic increase in light of the already razor-thin margins that govern most dining establishments, according to the press release announcing the survey results.

Dive Insight:

Restaurants are already facing a serious labor shortage with fewer teens entering the workforce. Without a pool of affordable labor, restaurants are having to offer higher wages to more experienced workers in order to fill even entry-level positions. Meanwhile, a few major retailers like Walmart, Target and Amazon.com have enacted wage hikes, making positions within their ranks more appealing than restaurant jobs.

If restaurant operators are forced to pay a $15 minimum wage, it would likely exacerbate the already stressful financial situation they face as a result of the growing shortage of the entry-level workforce. The National Restaurant Association came out strongly against the Raise the Wage Act, which would increase the federal minimum wage to $15 over the next five years. It cited suppression of new job creation as a main driver for its stance, noting that the restaurant industry is the second-largest private sector employer in the U.S.

Proponents of raising the minimum wage cite a number of studies in support, including a report suggesting that gradually increasing minimum wage to $15 by 2024 would boost the income of nearly 40 million workers, or more than one-quarter of the workforce.

Although consumers support the feel-good sentiment behind Fight for $15, it’s unclear whether they are willing to take a hit to their wallets to make the dream a reality. Some restaurants have already added a surcharge to customer’s bills to cover employees’ healthcare costs and other benefits like paid time off. Adding a surcharge instead of raising menu prices allows consumers to see a clear distinction in where their dollars are being spent. Strict price raises may lead some consumers to believe that the restaurant is just padding its pockets, whereas a surcharge tells the consumer that the extra dollars are going toward benefits or minimum wage increases.

The federal minimum wage has remained at $7.25 since 2009, leading a number of consumers to see a good reason for an overdue increase. More than half of Americans support increasing the federal minimum wage to $15 an hour, while another 27% said it should be increased but to a lesser amount, according to a recent Hill-HarrisX poll. Public opinion may be the tipping point in this debate, as consumers have even driven McDonald's to stop lobbying against minimum wage hikes earlier this spring.