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$15 an hour Minimum Wage For McDonald’s Workers, What Does this Mean For Fast Food Stocks?

Today workers at McDonald’s (NYSE:MCD), Wendy’s (NASDAQ:WEN), Burger King Worldwide Inc. (NYSE:BKW), and Yum Brands (NYSE:YUM) are on strike across the 50 states for wages of $15 an hour. But how does this affect the stocks price?

Currently the average wage at fast food restaurants is $9 an hour but it can go as low as $7.25 an hour. Increasing wages to $15 an hour could have a major consequences:

1. The cost of living will increase. If McDonald's increases wages to $15 an hour the cost will be passed on to consumers, so higher prices of food.

2. Increase in wages decrease profit margins for the company, decreasing net earnings will result in decreasing stock prices.

What do you think will happen? Will they get the wage, or is this just a call to negotiate, maybe $12 an hour.