Huffpost Business

McDonald's Stock Price Hammered After Obama's Minimum Wage Proposal

Posted: Updated:
This May 2, 2012, photo shows a sign advertising job openings outside a McDonald's restaurant in Chesterland, Ohio. McDonald's stock price and that of other fast food restaurants dipped on Wednesday on news of a possible hike in the federal minimum wage. (AP Photo/Amy Sancetta) | AP

Some investors apparently are not enthusiastic about President Barack Obama's proposal Tuesday to raise the federal minimum wage to $9 per hour.

The stock prices of low-wage employers including McDonald's, Burger King and Papa John's fell on Wednesday as the stock market rose. McDonald's stock price had plunged 1.55 percent as of early Wednesday afternoon.

But not all low-wage employers saw their stock prices plummet. Walmart's and Target's were roughly flat, and Wendy's stock price slightly declined.

Howard Silverblatt, senior index analyst for S&P Indices, told The Huffington Post that Obama's minimum wage proposal "definitely adds some kind of pressure" to the stock prices of fast food restaurants such as McDonald's, but cautioned, "I can't say there's a trend."

Silverblatt said that a higher minimum wage "would definitely push profits down. It would mean less money for shareholders."

He added that fast food restaurants probably would try to pass along the cost of higher wages to consumers by raising prices, but because their competition is so fierce, to some extent they would have to "eat it themselves."

(Hat tip: Business Insider's Joe Weisenthal.)

Earlier on HuffPost:

10 Things The Fast Food Industry Doesn't Want You To Know
Share this
Current Slide

Suggest a correction

Around the Web

Obama Urges Minimum Wage Increase and First-Ever Indexing

McDonald's Employee Excited to Be Earning Minimum Wage After ...

McDonald's minimum-wage workers, high-paid CEOs highlight ...

Tyree Johnson, McDonald's employee, earns minimum wage after ...

Do all McDonald's employees earn the minimum wage ...

Minimum wage rises to $7.67 in 2012, up 36 cents - Sun Sentinel

McDonald's to hire 50,000 workers, starting April 19 - Apr. 4, 2011

US Stocks Fall as Investors Weigh Data After Address