Sonic CEO warns higher wages mean higher prices

Posted at 3:46 PM, Mar 31, 2016
and last updated 2016-03-31 15:46:14-04

As protesters across the country call for higher minimum wages, Sonic's CEO says customers should be ready to pay more if workers get their way.

The fast-food corporation's leader Clifford Hudson said in a company conference call this week if minimum wages are raised, price hikes will be necessary to keep the restaurants profitable.

There's been a fear raising the minimum wage will lead to fewer jobs. However, if wages do get a bump, Hudson said he doesn't expect a drop in workers at his restaurants.

His comments feed into a another, broader argument, though: that prices across industries will rise and actually take away from the purchasing power of workers who earn a higher minimum wage.

Sonic's 3,000-plus restaurants employ many low-wage workers, so if Hudson's views are anything to go by, they could be pretty telling for what could happen in the fast-food industry if minimum wages rise.

This video includes clips from Sonic and CNBC, and images from Getty Images.