Chipotle chief financial officer Jack Hartung admitted last week they would be forced to raise menu prices if the government mandates a $15 per hour minimum wage.
In fact, Hartung said most restaurants would not absorb the costs of forced increases wages, but pass them onto customers.
What are the details?
While speaking on a quarterly earnings call last Wednesday, Hartung said Chipotle executives would raise menu price to “offset” the costs the restaurant would incur if the federal government forced them to pay each of their nearly 90,000 employees at least $15 per hour.
“We’re not that far off of like for example, a $15 number. But let’s say, for example, that there’s going to be an across-the-board 10% increase in our wages,” Hartung said, Business Insider reported. “And that would, to offset that with menu pricing, that would take us 2% to 3% price increase.”
Hartung said forced wage increases — amounting to an average of 15% overall — and increased menu prices would be “very manageable.”
Business Insider reported, “For customers, this could mean about a 20¢ to 35¢ additional charge per meal, as the average person spends about $11 for a burrito or other meal at Chipotle.”
What about other businesses?
Hartung predicted that Chipotle would not be the only restaurant to raise menu prices if the government forces an increased minimum wage.
“We think everybody in the restaurant industry is going to have to pass those costs along to the customer,” he said. “We think we’re in a much, much better position to do that, than other companies out there.”
As Insider reported, Texas Roadhouse and the Cheesecake Factory are examples of two such restaurants that raised menu prices after being impacted by forced wage increases.
Raising menu prices is, at this point, a tried-and-true response to minimum wage regulation for many restaurant chains. Executives at Kura Sushi, The Cheesecake Factory, and Texas Roadhouse all said in recent calls with investors that, when states and cities raised minimum wage, the chains responded by raising menu prices.
“I would say there is a short-term shock,” Texas Roadhouse CEO Wayne Taylor told investors in late October. “And then long term, there’s an adjustment, both on our side and the guest side.”
Democrats promised they would raise the minimum wage once they gained power of the White House and Congress.
They attempted to pass a federal minimum wage hike in President Joe Biden’s COVID economic relief bill, but the effort ultimately failed.
Rocket Science 101. Boy that took a long time for them to figure that one out! Stupid People, who were they thinking was going to pay for the increase…Johnny Appleseed. (No one knows who he is anyway)
How do these people expect to collect their $15 an hour after they cause businesses to shut down because of their greed
So are the liberal business owners finally acknowledging that the $15 minimum wage increase will basically put them out of business? Oh, to be a fly on the wall and actually hear from these a**holes actually say about it! When it happens, then no one will gain anything with the increase because the customers will be gone and then the businesses will be gone.
TANSTAFL – There Ain’t No Such Thing As a Free Lunch
It’s a simple concept very hard for many to grasp it seems. Back when minimum wage was 2.50/hr a vending machine soda was 25 cents. Now minimum wage is 7.25/hr vending soda cost 1.00-1.50 and seen 2.00 at some locations like airports. In 1974 I could by a McD hamburger, shake and fries 1.25, now 5.00 mimimum.
If you keep increasing minimum wage price of everything you purchase will go up as well. Rather than look at minimum wage the metric you should monitor is purchasing power. I could by more back in 60’s and 70’s as a student working part time making minimum wage than I can now making 10 times as much. Drove through a Taco Bell recently just my wife and I and dropped 18.00.
Those extra wages come at a price for everyone.
Minimum wage was NEVER meant to be a long term living wage but a starting point to get in door and build experience and skills that are eventually worth more to the company so they pay you more.
If enough folks don’t patronize Taco Bell the prices will come down. If your pants keep coming down Taco Bell will keep smiling all the way to the Bank while you’ll be left squealing like a pig. Enjoy your tacos.
Your contention has not proven accurate in a single instance.
Good point about purchasing power. Why do you think your purchasing power has gone down? Answer: Wages have not kept track with prices, or to put it another way, the rich keep getting richer. I will simply buy more food at the grocery store and go out less until they bring down their prices or find some way to attract me.
I remember as a kid, my mom would send me and my sister to the pool. She gave us $2.00
It was enough for both of us to get into the pool and have some money left over for some snacks. These days there are candy bars that cost upwards of $2.00
So yeah, even in my lifetime, I’ve seen the effect of prices skyrocketing, while quality stayed the same, or in many cases, got worse.
Simple economics. You would have to be an idiot or worse not to realize this. Same with too much money in circulation – prices go up and the rich end up with more. Those at the lower end stay there. What a wonderful world we live in.
Heaven forbid these greedy corporations will not give up their huge profits!! Corporate greed is a HUGE problem!!!!
So move to Russia, bonehead. No corporate greed there.
Wrong! Putin was a Lt. in East Germany in 1975. Look where he is now! Putin approves all corporate greed in the Russia!
Not one single Neo-fascist democrat has EVER been able to make a cogent argument for raising the minimum wage to $15.00 per hour instead of $20.00 per hour or $50.00 per hour, or maybe even $150.00 per hour. After all, if $150.00 is good wouldn’t $150.00 be GREAT??
minimum wages….
NOT AN ENUMERATED POWER AND OUTSIDE THE AUTHORITIES granted the the federal government!
ALL, AS IN EVERY ONE; of the union contracts has a PREVAILING MINIMUM WAGE CLAUSE! regardless of town, city or State.
THAT clause has a ratio built in to determine the starting wage for new hire union workers, and all levels above them.
IF Union scale begins at 1.35% of the Prevailing Minimum wage (we’ll use $10 per hr)
Then the lowest union wage will be $13.50.
Assuming a current $7.50 Minimum Wage, a bump to $15 would DOUBLE THE UNION WAGES….
……
As well as DOUBLE THE UNION DUES!
UNION DUES HIRE POLITICIANS!
Any more questions?
Unions these days also donate your money to the Democrat party, even when they AGREED to allow you to dictate where certain donations went!
And where is some of the biggest issues in America right now? Teaching. Run by a Union, who is doing nothing to protect the children from harmful indoctrination. The Police. Run by a Union that refuses to protect its own from fraudulent lawsuits.
You all are basically indicating food service prices, although minimum wags overall affect all types of businesses.
From retail outlets like TARGET, LOWES, WALMART, and so on. You feel it more when you go to buy a meal, but look at everything that you purchase. A man’s undershirt used to be .69 cents in a 4 pack. Now you are talking $6.99
for the same the overhead of any establishment makes the stores prices go up. It doesn’t matter where you go to buy groceries or clothing, sporting goods or whatever.
The Democrat party looks for 2 things, POWER, HOW TO FILL THEIR POCKETS.
They have no idea what normal every day people have to go through to make ends meet. These politicians are all millionaires. They don’t fuss over paying $10 for a hamburger. They just send their staff out and charge it to the tax payers.They don’t worry about buying groceries or paying mortgages. They have no heart for the everyday people.