> It found that wages increased by 18%, employment numbers remained stable and menu prices increased by only 3 to 7% > The study’s authors said that profit mar

> It found that wages increased by 18%, employment numbers remained stable and menu prices increased by only 3 to 7% > The study’s authors said that profit margins at fast food restaurants are relatively high compared to full service restaurants, companies have room to absorb higher wage costs. This doesn't really look like companies absorbing higher wage costs. Labor is merely one expense in the cost of a good like fast food. You have managerial overhead, capital equipment, marketing, taxes, etc. Based on a quick googling, restaurants target a labor cost percentage of about 25-35% with fast food being skewed to the lower end. Then an 18% increase in the cost of labor passed directly to consumers would be a 4.5-6.3% increase in the total. This seems very much in line with the 3-7% observed. [Edit] Looking at the actual paper, it's not a 3 to 7% price increase, it's 3.7% which they claim is 62% of the total cost increase. So they are using a cost of labor of 33%, while the price rise is equivalent to a cost of labor of 20% fully passed on. That's a much more defensible claim.