Complaining of low profit margins that generally accompany inexpensive menu items, most fast-food restaurants try to keep wages down. However, some fast food chains are seeing the benefit in paying employees above minimum wage and even above the median hourly wage for fast-food workers nationwide of $8.83, because it allows their workers to opportunities to achieve more and treat customers better than any other restaurant chains. Who are these fast-food crusaders? Two of them are Boloco, a fresh and healthy burrito restaurant, offers a median hourly wage of $11.50 and Shake Shack, a high-quality burger restaurant, offering a median hourly wage of $10.70.

Questions:

1. What are the major benefits of paying higher wages to fast-food workers, according to the article?
2. What additional benefits does Shake Shack provide to employees and how would they record these as journal entries?
3. Do you agree with Zeynep Ton, a professor at the M.I.T. Sloan School of Management? Discuss.
4. Check out the M.I.T. Living Wage Calculator for your state. Discuss your results and what you think it means in terms of the future of fast-food restaurants in your state.

Source:
Greenhouse, S. and S. Strom. (2014). Paying Employees to Stay, Not to Go. The New York Times, July 4 (Retrievable online at http://www.nytimes.com/2014/07/05/business/economy/boloco-and-shake-shack-offer-above-average-pay.html?src=me&module=Ribbon&version=origin&region=Header&action=click&contentCollection=Most%20Emailed&pgtype=article&_r=0)