Chipotle Raises Prices Due to Minimum Wage Hike

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Sat, Jul 11 - 4:45 pm EST | 2 years ago by
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    Capitalists everywhere uttered a collective “I told ya so” as the popular burrito chain, Chipotle, raised the prices on their food in response to the minimum wage hike in the San Francisco area.

    The rise in prices correlates directly with the minimum wage – now set at $15 – which were increased by 14.4% to match the 14% elevation in pay. San Francisco isn’t the only city to experience the hikes, as Denver, Minneapolis, Chicago, and Orlando are experiencing increased prices of their own.

    Chipotle Raises Prices

    To anyone with a lick of common sense, this is not news. Logic dictates that if the company has to spend more, it must take in more to balance out the ledgers. This fact seems to escape many “raise the wage” advocates, including President Obama himself.

    On WhiteHouse.gov, the page promoting “raise the wage” says: “Raising the minimum wage nationwide will increase earnings for millions of workers, and boost the bottom lines of businesses across the country. While Republicans in Congress continue to block the President’s proposal, a number of state legislatures and governors, mayors and city councils, and business owners have answered the President’s call and raised wages for their residents and employees.”

    As Chipotle has shown, raising the minimum wage will only make the products the people shop for more expensive. The complaint that minimum wages aren’t enough to live off of will forever be true, no matter how much you raise it.

    It’s a never ending cycle, and one that not only raises prices, but eliminates jobs.

    “We revisit the minimum wage-employment debate, which is as old as the Department of Labor,” said economics professor of UC Irvine. He goes on to say, “We conclude that the evidence still shows that minimum wages pose a tradeoff of higher wages for some against job losses for others, and that policymakers need to bear this tradeoff in mind when making decisions about increasing the minimum wage.”

    Furthermore, this will hurt the workers much more than it will hurt the corporations, as McDonald’s has demonstrated through the use of automated machines in place of workers. Random maintenance is much cheaper than a $15/hour worker who requires breaks, vacations, and insurance if they’re full time. Why hire an expensive worker, when a machine will do the job just as well, if not better, and won’t protest outside the business when it gets mad about its paycheck?

    Economists will continue to debate the merits of minimum wage hikes till the second coming, but the proof is in the guac. If the business has to pay up, then so do you.

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      • Kasimir Urbanski

        Your last paragraph is about mechanization, not minimum wage. And it’s (hopefully) coming, and soon. I would much rather see a world where machines are doing most of the work and we rethink our entire economic system around that, then one where we try to cling to the present economic system and expect people to do a crappier job than a machine could for less money than they used to only to justify their ongoing labour.

      • Bob Smitley

        This is a total crock.

        Anyone who knows econ 101, knows that the price of a product is dependent on it’s value to it’s customer, more than the cost of the product

        All Chipotle’s has done is try and make an excuse for maintaining, what apparently is an unreasonable profit margin, and blaming it on the minimum wage.

        All they will succeed in doing is driving customers to their competition and going out of business.

      • Sumner Kagan

        ummm, DUH! anyone with half a brain knows this is what happens. It’s called real life. I love the retards who think that they will just find the money elsewhere. Profit margin is required to keep doors open, bills paid. It’s scary to think there are people in this world who think that a business can run on no profit OR even worse, think all businesses are in business just to give people jobs.

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