Investigating the Efficiency Wage Theory in US Fast Food Restaurants

This paper investigates the correlations between wage and productivity in United States fast food restaurants. The research examines whether or not the industry’s expansion is based on the labor productivity improvement. The author selects four major fast food firms, and compares the representative firm’s performances with its group mean. Using data from Bureau of Labor Statics, the wages are lower generally than the economic sector average; but the productivity is not lower than the National average. The representative firm, McDonald, does not show significant change in productivity, rather productivity has followed the stable trend over time. The research found that the wage in the fast food industry was lower than economic sector average, but productivity was not lower. It is recommended that, the relation between wage and productivity will more deeply examined. The future examination, the other variables that affects wage and productivity will be controlled.