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

02/13/2013 02:28 pm ET | Updated Feb 13, 2013
  • Bonnie Kavoussi Master's student in economics, the University of Michigan

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."

Earlier on HuffPost:

10 Things The Fast Food Industry Doesn't Want You To Know

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