Blog

Short blog posts, journal entries, and random thoughts. Topics include a mix of personal and the world at large. 

Never eat alone

After my Wednesday evening workout session, I typical go to the local Chipotle for sustenance. There’s no better way to get the big three macros (carbs, protein, and fats) covered than a Chipotle burrito bowl. I’m fairly convinced one can properly bulk up feeding on that alone. Best of all, and the whole point of going there in the first place: I don’t have to cook after a strenuous workout.

But that post-exercise meal plan is changing. California’s new minimum wage law for fast food workers - a luxurious (sarcasm) $20 an hour - went into effect on April 1st. In response, franchises with over 60 stores nationwide (that would be most of the fast food chains we know and frequent) have raised menu prices. You didn’t think they were going just absorb the increase in labor cost, did you? Profit margins are too holy for that.

The price for the burrito bowl I usually get at Chipotle went up about $0.75. That may seem trivial, but fast food costs have already ballooned in recent years due to the pandemic supply chain and inflation. The latest increase is the straw that is breaking my camel’s back. After working out this evening, I cooked at home instead. $15 for a burrito bowl is so not Raven.

While I am happy for the fast food workers getting a raise, I just won’t be the one supplying those dollars. In fact, eating out has become so expensive that I am implementing a new personal rule: no more outside food unless I’m with others. The social aspect is definitely worth paying for. Otherwise, like the McDonald’s meme goes: we have food at home.

It goes around the world just.

Would you like some fries?

Is anyone eating at McDonald’s these days? Prices there have become absurd. A cursory check on the McDonald’s app shows (for San Francisco, California) that you cannot get a meal - a sandwich, a drink, and fries - for less than $13. For the same kind of money, I rather go to In-N-Out for a much fresher burger. The last time I actually ate at McDonald’s was when they were giving out free fries.

Inflation is inflation, right? Cost of goods sold has gone up, and so has cost of labor. Here in California the minimum wage for fast food workers is scheduled to go up to $20-per-hour in a few months. McDonalds (and other restaurants) have already signaled they are going to raise menu prices in response. When a meal is already at least $13, who the heck is willing to pay even more?

It’s basic economics: you can only raise the prices so much before customer demand goes down. I understand McDonald’s want to protect their margins, but it can only go so far. I have to think we’re already at that critical juncture of price vis a vis demand. If my middle-class income is cutting back on McDonalds due to cost, people making less are certainly doing the same.

The high prices won’t change until these fast food places feel the squeeze of less demand. It looks like it still hasn’t happened yet, despite my not so herculean efforts. Revenue and net-income for McDonalds beat expectations due to menu price increases. This is just pure greed, hiding behind the facade of inflation.

Scare the spirits.

Increasing feedback loop

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!