Orr 1
Cameron J. Orr
E-Marketing Major
August 31, 2007
Why did the price of Wendy’s frosty increase after the first of the 2007 year?
Every year thousands of people petition to increase minimum wage. Once passed this seemingly harmless increase will sometimes hurt those that need it the most. A minimum wage increase creates unemployment, inflation, and sometimes will cause many fast food chains to increase there prices.
[1]About 10 months ago back in January I made a startling discovery. I was at my local Wendy’s and there on the menu the price of the beloved frosty had increased. A once 99 cent frosty had jumped to now a $1.19. Nearly a 20 percent increase. At the time I was irate, I wondered what happened over night that caused Wendy’s to increase there prices on several of there items, not just the frosty. This increase made me very curious so I set out to discover what caused this drastic change.
Last year about this time a young lady approached me in the student union. Instantly I knew that she must want something. She approached me and asked me to sign a petition to increase minimum wage. Without thinking I signed it. Who wouldn’t want to increase minimum wage. She told me that minimum wage could be increased to $6.85 an hour. I remember sarcastically saying well sure, how about we raise it to $10 an hour because I never thought this would ever happen. Just a few short months later it happened, and at first let me say I was very happy, but this happiness was short live because after putting two and two together, I discovered what had caused Wendy’s price increase.
One of my biggest concerns that I have with a minimum wage increase is what it does to the price of your everyday goods. If a company is forced to increase there workers wages there not just going to sit around and let profits slide. There going to do several things. One, they might lay off several of there workers, or two, they might up the price of there goods. This is exactly what Wendy’s did. In order to compensate for the increase in there workers wages, they just went ahead and increased items on there menu.[2]
Another problem that arises from the minimum wage increase is job loss. With unemployment already a concern in the US, why would we want to make it a greater concern? It’s obvious that if a company has to start paying their workers more, in order to make up for their losses, they’re going to begin to lay off many workers. In most cases those workers that are being laid off are inexperienced teens such as me. Since on the average teens are the ones making minimum wage, it’s only fitting that its teens that get the boot after minimum wage increases. Then those workers who don’t get fired might end up making more money, but they will also start paying more for the products they buy. According to an article on the ill effect of minimum wage it said, “A forced increase in wages is not an increase in purchasing power; it is almost always the opposite.” (Bragg)
But why do we have minimum wage? Minimum wage was set up to help the poor make more money so they can survive. But does it actually do this? Most workers that earn minimum wage are teenagers. This means if teenagers are earning minimum wage and it’s not the poor then its obviously not going to help them. According to one website that I found it said quote, “Only 2% of workers that earn minimum wage are in poverty.” (Saxton) That means when we increase minimum wage instead of helping out the people that need it the most, were actually hurting them. Since the poor aren’t the ones making $6.85, there forced to pay more for goods and services and stand a chance that they could end up losing there job because of this minimum wage increase.
Has anyone noticed an interesting trend with many companies of lately? Large companies lately have been packing there bags and heading overseas. According to the Common Dreams website U.S. corporations are closing down there factories and shops in the US and are moving them to India, China, Japan and other low cost countries where there citizens will work for next to nothing. (Zielenziger) Think this might have something to do with the increase in minimum wage? In Ohio some of our largest factories are leaving because they can’t afford to pay there workers anymore.[3] Why would these factories want to remain in the US when folks in Mexico will work for half the cost? Companies have found that by moving overseas they can pay there workers little, they will work just as hard as US workers, they can find land for cheaper, and this all adds up to big profits for the shareholders.
It all started with me taking a trip down to my local Wendy’s late one night to pick up a large chocolate frosty. But after brainstorming and really digging deep I was shocked to discover what an increase in minimum wage is doing to our economy. How much it is hurting me as well as many others. I am partially to blame, because I signed the petition to put that increase on the last ballet. At the time I was uninformed, but now I know the facts.
Work Cited
Bragg, Dave. "ProgressiveU." The Ill effects of Minimum wage, March 24, 2007 September 3, 2007 <
Saxton, Jim. The Case Against a Higher Minimum Wage. Joint Economic Committee Report. 7 Sep 2007 <
Zielenziger , David. "US companies moving over seas." Common Dreams. 2003. NewsCenter. 7 Sep 2007 <
[1] Wendy’s in Mogadore Ohio
[2] Items such as baked Potato, Chili, and frosty’s
[3] Companies like Rubbermaid