A new bill in California going into effect next year will see fast food workers - in chains with at least 60 locations throughout the United States - earn at least a $20 minimum wage. That is great news for the workers, but bad news for patrons. McDonald’s and Chipotle already signaled plans to increase menu prices in response. In a time when eating a full meal at McDonald’s is already upwards of $10, prices getting even more expensive is kind of grating.
And it won’t be just McDonald’s and Chipotle, that’s for damn sure.
Because corporations aren’t going to cut into (often times fat) profits to pay its workers more. Shareholders simply wouldn’t have it: “What do you mean there’s less profits this quarter due to labor cost?!” That burden gets passed onto the customers. The UAW strike against the American big three automakers? The concessions made by the automakers will no doubt increase vehicle prices. Kaiser Permanente staff successfully bargaining for a raise? Insurance plans pricing is going up!
Isn’t it all kind of creating its own feedback loop? Labor costs go up, so prices increase in response. Then that makes people feel like their money doesn’t buy as much anymore. So they ask for wage increase at their place of employment (collectively bargained or otherwise). Of course, whatever that employer sells will have to go up in price (remember: got to protect the profits). Back and forth in symbiosis: workers get paid more, things get more expensive. An inflation arms race.
I am all for labor getting more money. I am a proud union member, super fortunate to enjoy collectively-bargained wage increases on a regular basis. That said, sometimes I wonder: what good is more pay, if everything else gets more expensive? It all cancels out! I’m not kidding: last year’s wage increase all went to paying for food, which has price inflated tremendously in recent years.
Fire in a the hole!