EDIT: One of the commenters pointed out that my analysis is flawed in that I assume wages go up globally. Keep that in my when you go through this, and take a quick look at my two follow-ups: 1 addresses macroeconomic consequences and 2 addresses his point and the effect it has on corporate vs local franchise profits.
No doubt you've all heard of the idiots agitating for fast food workers to get paid $15/hr, which is, incidentally, more than some engineering internships pay. MATH TIME! (Not that I expect many of those agitators can actually do math. "It's hard." Boo flippin' hoo.)
Assuming that the numbers Wikipedia gives me are close enough, let's do a nice little Fermi estimate:
Current McDonalds' profit: $8.8 billion (this will be important)
Current McD's revenue: $27.6 billion (so will this)
US Minimum Wage: $7.25/hr. This will stand in for an average worker salary, and even if it is too low, that actually skews the numbers in the agitators' favor, as you will see if you can do math.
Approx. McD's workforce: 1.8 million workers
Let's now assume an average of 20 hours per week, that is, half-time. This will again skew the numbers to a LOWER operating cost than actual. Assume 50 workweeks per year.
1.8 million workers * 20 hrs/(worker*week) * 50 weeks/year * $7.25/hr = $13.1 billion (okay, 13.05. whatever)
McD's has an approximate labor cost of $13.1 billion currently.
$27.6 billion - $8.8 billion profit - $13.1 billion labor = $5.7 billion other costs
This jives with the standard economic estimation that labor is approximately 2/3 of a business' operations cost.
Now, let's double the average salary to $14.5/hr, close enough to their demands.
$13.1 billion labor * 2 = $26.2 billion labor costs
This is only $1.4 billion below yearly revenues, which, assuming other costs remain the same, puts McD's in the hole by a lot.
$27.6 billion - $26.2 billion -$5.7 billion = -$4.3 billion
$4.3 billion in the hole. That's a lot, nearly half of the current profit. Not doable.
Now, let's assume that McD's gives this raise but wants to break even. They need $4.3 billion in extra revenue. Assume it all comes from price increases (this is a Fermi calculation. We don't like complications)
4.3 / 27.6 = 0.156
We're looking at a 15.6% price increase JUST TO BREAK EVEN if this raise were to occur.
What if they want all of their $8.8 billion profit still?
$4.3 billion + $8.8 billion = $13.1 billion more revenue needed.
13.1 / 27.6 = 0.475
To keep the current profit level, McD's needs to raise prices by almost half again, at 47.5%
What's the conclusion from all these numbers? It's simple. That big of a raise simply cannot be absorbed by McDonald's, and probably not by any other member of the industry, if their numbers are at all similar.
If I messed up any of my calculations (which I don't think I did), please point it out. ProdigalSon out.
ps I think the data is global, but my point remains.