Skyrocketing Costs Driving Cheeseburger Prices Up
The Wall Street Journal reports Skyrocketing Costs Driving Cheeseburger Prices Up
A $16 bacon cheeseburger may not be enough to save your neighborhood bar and grill.
Independent restaurants are on financial life support, owners say, squeezed between escalating payroll costs and diners’ dwindling tolerance for ever-higher checks. Wages for waitstaff, table bussers and line cooks will grow more expensive for many eateries this year, with 22 states in January raising the minimum wage for hourly workers.
In January, 59% of small-business owners reported higher labor costs were their biggest source of inflation, according to a survey of more than 425 entrepreneurs conducted for The Wall Street Journal by Vistage Worldwide, a business-coaching and peer-advisory firm.
For independent restaurants that make food from scratch, higher labor costs are particularly painful.
Waffle House has signs on doors now informing customers that all “take out” orders will include an automatic 20% gratuity added to the bill to be split between the cooks and the server who took your order
So I guess my plan to only do “take out” is over now too. And after some conversations, this tactic is growing with other restaurants too
Taco Bell announced they will raise minimum wage in March. Likely, all fast food restaurants will do the same. It’s interesting they raise wages after the first quarter. This explains Wendy’s recent scheme to use congestion pricing to disguise inflationary labor costs. An alternative to shrinkage, once product sizes reached their minimum. The Fed’s control of inflation is transitory.
April is less than a month away, when the Democrat dictated fast food minimum wage goes to 20 an hour in California. Except at Panera Bread, due to the owners cozy relationship with Newsom. Talk about a lack of fairness, equity, whatever. Wondered why there was a carve out for stores that make their own bread. It’s political connection, not alleged economic disadvantage.
I would guess the routine is that the middle class can afford to pay higher food cost, as they make more money than the FF workers. However, it drags down their standard of living, if they continue to eat there. Actors and writers just got a pay raise here and this will take a bite out of them.
It HAS gotten ridiculous. It is not unusual to pay nearly $50 for lunch for just my wife and I in a local Mexican Rest., which used to be $35 tops with two beers, and a split lunch (Fajitas). We were just In Mexico last month, and beers could be had for under $2 and snacks, Guacamole for example, was just $4. That was in Ajijic, a tourist Place.
Retirees need more money also. SS 3.2% 2024 COL boost is far too small. A shame we can’t do like the Swiss.
———
Swiss vote to give themselves a bigger pension
3 Mar 2024
By Imogen Foulkes
BBC News, Geneva
Swiss voters have given themselves an extra month’s pension each year – in a nationwide referendum focusing on living standards for the elderly.
The government had warned that the increased payments would be too expensive to afford.
But almost 60% of voters said ‘yes’ in Sunday’s poll. Separately, 75% rejected raising the pension age from 65 to 66.
The maximum monthly state pension is €2,550 (£2,180; $2,760) – not enough, many say, to live on in Switzerland.
The cost of living in Switzerland, particularly in cities such as Zurich and Geneva, is among the highest in the world.
…
https://www.bbc.com/news/world-europe-68463978
Only $53 to pick up 1 small thin crust jalapeño pizza and 1 medium regular crust pep pizza at some rando place close to where we are .
Had we “ate in” the place with drinks and tip it woulda been $70+
We are no longer “dining out”. Limiting to only take out and probably half the frequency. Will drive cars longer. Will wait on maintenance longer. Will repair when an option going forward instead of replace. Gifts fewer and less expensive. Everything getting massively curbed now. Groceries, fuel, utilities is it for at least the rest of 2024 and probably longer. Prices are insane everywhere for everything and I choose not to participate the same as before the $13T injected inflation boom ruined it all
No doubt. For what it costs my wife and I to eat out at a casual, no-frill, restaurant, we can buy food to eat at home for a week. We used to eat out once a week. Now, it’s once a month.
I feel your pain. My one comment is that restauranteurs are getting squeezed not just by labor costs and food costs, but by building lease costs as well. Real Estate Investment Trusts (REIT’s), which own huge numbers of buildings and barren tracts of land in our major cities are charging enormous rents (lease costs) on business owners, year over year, and are making it all but impossible for individuals to make a profit, no matter what they charge.
Good thing California is raising the minimum wage at fast food restaurants to $20. Except Panera, apparently.
Wait! Wait. AI robots are coming.
Panera CEO embarrassed that got hand caught in Newson’s pants. Says will pay $20 also.
Panera CEO has sticky hands, so to speak. Panera is a TRUE rip off joint. We no longer go in there.
The biggest source of inflation is NOT labor costs. The source of inflation is money created out of thin air by the Fed and U.S. government being poured into the economy the last 4 years and ongoing.
Multi trillion deficit spending is completely unnecessary and adding fuel to the inflation fire.
Stop blaming the workers. Most of them have lost to inflation the last 4 years.
$13T in free and easy money between the FED and FED Govt over 2+ years. Fukin criminals with criminal effects on the bottom 60-80%
They hate us and don’t give a shit 4 years later…..
Hank, remind me when they GAVE A SHIT. Askin’ for reference purposes.
True about the general rate of inflation, but not true within sectors, especially in the short run. Eventually, you’ll see a correction in the form of restaurant closings and/or hours worked, etc., but not right away.
I agree. $20 a hour is a measly $40K a year, which after taxes is likely $32K. Rents eat $12K, Food (per person) $350 a month x12= $4200. Car payment, $475 and fuel could be $100 easily a week if one commutes. NOT MUCH LEFT. Maybe a grand a month for FUN and dating, if you are single. OH, and add Health Ins premiums and INSURANCE and that $1,000 a month is down to nothing and thus NO SAVINGS and no chance of accumulating a down-payment for a home. No wonder Millenials and Gen Zers are unhappy.
As the Davos criminals would say, let those in flyover country eat bugs
Yup, and the ones telling us to give up everything … won’t be giving up anything
Grill your own cheeseburger. It’s cheaper, tastes better and less harmful than a pink goo burger you get down at your local burger joint. Also, no spit or boogers in it and certainly no attitude from “Lashonda” at the drive thru.
The Urban Majority burned and looted every grocer. Fast food is all they eat.
I respect your “Lashonda” as a person who is working … that said, as politicians continue raising labor costs at the same time as automation costs are going down and improving in capabilities will have a predictable end. At first kiosks and apps will remove the need for cashiers … then even food prep automation will allow 1 cook to do what 3 or 4 do now. The sky is the limit. When both remaining minimum wage earners California are making $50/hour … the stores will stay open.
both remaining workers will have engineering degrees.
Engineers don’t generally make minimum wage. If they did, $50 minimum wage would make more sense. There will always be plenty of unskilled people out there … and they are demanding more and more pay. I’m guessing at $20/hour … these folks will be making more than the entry level privates in the military.
In the MIC, you get free food, clothing and Shelter … AND, you get to Kill people. What a deal!
As the father of an enlisted Marine … that food clothing and shelter is not free.
And you can buy quality meat. Me, I like mine RARE. And I never eat beef. Only bison and venison, both regularly available in stores here in CA.
Yup, it’s RARE chicken and turkey for me!!!
In my college years in the mid 1980’s, I would get four Burger King double Whoppers with cheese for about $5 (I was an athlete and needed to eat a lot).
A few years ago, one Wendy triple with cheese $5 something. Now the same burger costs over $9. We are approaching a doubling in price over 4 year period.
OK, young man: I gotcha beat. Back in 1966, when I was a Teen, we went down to Pete’s Pizza and for $1 we got LARGE PIZZA’s (Brother and I – – Mom divorced Dad and he was dating). Sometimes on a Friday night, we bought burgers at McDonald’s (one of the First in Illinois) and the total cost for their cheapest with fries and a Coke as well under $1.
Plain hamburger $0.15.
Fries (only one size) $0.10.
Chocolate “milk” shake (only one size) $0.19.
No mention of the parasitic land lord class that owns the building the business is located in. Rents for these buildings are outrageous, and are one of the highest costs of doing business.
The landlords are no more parasitic than any property owner whose wealth has been inflated by counterfeit central banking fiat, and massive migration.
Don’t forget red tape preventing competition.
So true, you cannot blame the people actually doing the work for high prices. There are lots of pigs at the trough.
im guessing you dont pay property taxes….
Thinking any of this sustainable.
Parasitic class?
You can smell the fear of the grey tottering rancid boomers, who rapaciously robbed the future to live out their days in relative opulence. Smugly stepping around the homeless on their way to buy an $11.28 Chicken Deluxe.
Thinking rising interest rates will not suddenly lock up the real estate economy like in 1990. Terrified boomers all putting their houses up for sale at once as in 2010. An exodus from plunging equities from the 2nd dot com bubble (currently juicing the market) seeking safe haven.
No, This will never happen
The predicted great wealth transfer will melt into the nothingness from which it came, under this scenario. Plan accordingly.
A restaurant in Bend Oregon has 9 of 14 employees living in tents on national forest lands? No there won’t be any anger when the day of reckoning comes. I predict an OCCUPY MAXIMUS and revolution. Its not the Trumpers who are going to take it to the man, but as always, the youth.
Gen Z, (progeny of Gen X revolutionary Grunge era, counter culture revolutionaries) know the score and viscerally despise the Boomers and don’t believe their lies.
If Gen Z gets uppity, we’ll just misgender them and they’ll melt.
Gen Z has a plan:
It’s called “Day Of The Pillow”
Their tranny’s are planning on using pillows to suffocate all of you boomers in the nursing homes.
Everyone that does what the herd does and wins (temporarily) believes they’re a genius.
Winners are quitters – the pigs know none of you will quit – they will as usual wipe the table.
“All your assets belong to us”
Factually 30% of Gen Z are insane same as with the boomers. Their insanity manifests in very obvious ways.
The difference is the other 70% are way better informed than boomers ever were. About 35% do not believe in the simulation of reality they were born into. It’s all fake and 35% know it.
Maybe .5% of boomers get it.
You are askin’ the War generation, the Boomers, to stand by while you Lilly White, skinny-fingered Iphone users (complete with Zero fitness, confused as to your Actual Gender and WONDERING how you can get more Free money) THINK that you can get away with Murder. Do not forget that Boomers are GUN owners and know how to lock and load.
Just sayin’, youngin’.
OH, and I hope you get my humor. It is a Sat and I am having Cafe con Leche’. Hanging in Spain.
Factually, 90% of statistics in blog comments are made up.
I’m with you, those damn boomers working so hard and upgrading homes every 5 years or so because of their work ethic and taking business chances. We need to just give all of this to the genrations that have done nothing. They’re the ones who deserve it … we should hate on the ones who worked for it
I step ON the homeless to keep my shoe bottoms dry when it is raining and to avoid the Shit Piles. Come on man, Boomers have hearts.
Yo, fast bear –
GET THE HELL OFF MY LAWN!!!
You think all Boomers are rich? Your meds are on the table, take them!
Absolutely, cost of materials (when you can get them) are way up, maintenance costs are way up, property management is way up, insurance is thru the roof and going higher … and business loans at 3% for 5 years are now coming due and folks have to pay 7% or more. Still, it’s greedy of them to pass any of this on. They should just lose money like crazy otherwise they’re parasites.
Don’t mention self interested marking up in any of that inflation. Oh, and a 50% Discount/Rebate policy at retail sale would make that burger $8 and probably $6 or $4 with an inflation tax.
Taking a price you charge, and “marking it up” for whatever reason, labor costs, material costs, just cuz you feel like it, is not inflation.
Yeah, blame it on people trying to make decent wages, but do not mention skyrocketing rents.
Key Findings
Between the mid-1980s and 2010, the cost of a Bachelor’s degree in public and private colleges increased by 421% and 303%, respectively;
Over the same period, the average post-graduation salary saw a 165% increase, while the federal minimum wage jumped by a mere 116%;
Baby Boomers earning minimum wage could pay back their public college tuition by working just 1,410 hours—a figure that dropped to 481 hours for those earning the average post-graduation salary;
In comparison, Millennials earning minimum wage need 3,398 working hours to pay back their public college tuition and 1,004 hours if they earn the average post-graduation salary;
When attending private colleges, Millennials need to work five times as many hours as Baby Boomers to pay down their tuition if they earn minimum wage;
Despite enjoying more affordable college, Baby Boomers have racked up $78.2 billion in federal student loans to put their kids through school
The Above From ZH.
The inflation is in your imagination.
Move along there is nothing to see here.
The distortions are all in your minds.
“Everything is fine. The television said so.”
parents can get student loans? I didnt know that.
If they are students
OR
If they foolishly cosign for their kids
Or if they get a Federal PLUS loan.
The problem is that housing is considered an investment. Until/if that changes, cost of housing and rents will continue to appreciate barring relatively short economic reversals.
If nobody wants to work flippiing burgers for wages the restarauter can afford, then that’s a good thing. Americans would be much better off without any fast food even being available. If the invisible hand makes it happen, is that just as good as divine intervention, or maybe the same exact thing?
Fast food is still necessary, but perhaps what we have now will be replaced with Asian-style rice or noodle bowls. Maybe with spiralized veggie-zoodles. Or maybe with Cajun-style rice-and-beans.
Side note: Fast food has to pay employees higher minimum wage, but food trucks are owner-operated, have no employees and the operators might be receiving less than minimum wage. And/or a business that is operating underground, in violation of the law. Discussed in an article I saw in 1993. Such an immigrant woman operated such a food cart on the plaza in front of the Los Angeles Justice building, earning less than $5,000 a year; and happy, compared to earlier years of her life.
“Our policies won’t put small businesses under you liar!”
-five minutes later…
“We always knew our policies would put small businesses under you didn’t need that stuff anyway!”
Any evening that I pass by the local In/Out fast food place, there are often 30 or more cars lined up to get junk food for dinner. SAD!
“It’s turtles all the way down and inflation all the way up!”
With the largest wildfires ever destroying cattle land in Texas, expect the prices to skyrocket even more but it’s definitely not climate change. I’m also sure insurance costs will be skyrocketing to cover the billions in losses but it’s not climate change.
Add to it a depleting labor force and mountains of newly minted SS socialists getting $120/billion in free money and it’s easy to see why a cheeseburger cost $15. In 5 years it will be $20 or $25. Got TIPS bonds?
All of these small and independent businesses will go under and the bigger chains will get bigger. Got McDonalds stock?
Some years ago I had read of Mexico’s situation, having gone in a Biden economic direction. Because of that an underground economy had sprung up, disobeying many laws such as minimum wage. (Having a job is better than the right to receive a high minimum wage for a job you don’t have.)
Mexico’s versions of MexiDonalds could easily put those underground competitors out of business, except that union contracts and other government regulations made it impossible for MexiDonalds to compete in the obvious way. And sending the police to shut the underground down wasn’t so effective in Mexico. (La mordida, = bribery.)
Free? Been contributing since age 16.
No, you have been paying taxes since 16 the same way you pay gasoline tax, property tax, income and sales tax. The tax you paid back at age 16 went straight to someone else just like all taxes do. Are you expecting free gasoline in the future or a free house because you paid those taxes?
If you are collecting SS now, it’s coming from young people’s paycheck paying taxes working now.
SS is not your personal 401k or IRA or retirement account run by the government, it never was and never will be. The SS admin states that benefits can change at any time and it’s projected to go broke by 2034 because there aren’t enough young paying the tax and too many old demanding young people’s tax dollars.
Everyone cheering for a recession to hurt Biden is cheering for social security to go insolvent that much faster. That’s the irony people don’t get here, especially the ones dependent on SS.
That’s a feature, not a bug!
Far as I can tell all the steaks in Chicago were already ridiculously high ($60+). Sounds like an industry that could use a bit of trimming anyway.
“In January, 59% of small-business owners reported higher labor costs were their biggest source of inflation,” How many states raised their min wage? How many states raised SUI?
January is an obvious month for the wage/price spiral. No surprise to those that pay attention. Remember, both Powell and Yellen said prices are not coming down…no plan to stabilize and can’t as long as THEY keep spending money and the interest on the debt piles on….prices will continue to rise, mostly, and could get worse depending which grey swan turns black in the pond of pending foreign and domestic policy failures. Good luck to all.
AdamSmith about says it right, but to say again with hopefully more clarity and emphasis. – Many states legally raised the minimum wage. That need not cause general inflation. As Milton Friedman pointed out, you need a central bank printing money for that. If the Federal Reserve kept cost of money high enough and availability of money restrained, then in those higher minimum wage states there would have to be some January-induced juggling to determine who loses business, who loses pay, so that lower wage workers can be paid more. (All for a more socially just society.) (Another page out of Economics 101, about price floors, likely some low wage workers will lose their jobs.)
On the other hand, a month or more ago I had read more than one article of governments spending so much and unable to restrain themselves, so badly that the Central bank is obliged to buy the government’s bonds, monetize the spending. Yes, higher inflation and risk of hyper-inflation results. There is a term for it, (is it Fiscal Dominance?) which I know Mish knows but I am not sure I am remembering it.
Standards of living can go up, and standards of living can go down. How does society manage “go down”?, particularly when society is socialist minded that the better off take a larger standards hit.
Consider a broader range of what can happen, and the restaurant gets rid of ‘the cost of ownership’ by workers taking over the restaurant and tossing out the owner/manager. This has been done, and in this way justified, in Argentina.
“Our economy is just fine! Look to Argentina as the model!”
This sounds like your formula for standards of living going down.
I’ve said it before here and I’ll say it again…we’re experiencing permanent transitory inflation.
I track Cat Litter $3.99 two years ago Today $6.49—thanks DC Swamp
Is the bag still the same size as it was two years ago?
short cats
The first and only prices that we can REALLY track cause they are public and they infest every component of human existence are gasoline (and diesel) pump prices. And gasoine pump prices are the same as they were 11 YEARS ago. chicagogasprices.com Natgas prices are also at all time lows. Everything else is temporary as business try to recoup their Covid losses as fast as possible before all the suppressed competition is loosed on the public. 0% rates for 14 years let companies buy up a lot of competitors.
Hate to tell you, but it ain’t temporary. The best you can hope for is prices increase more slowly from here.
You mean prices are guaranteed to rise with a fiat currency? Heavens to Betsy!
The government (FED) wants at least 2% inflation each and every year! That guarantees an upsloping price curve over time.
I would agree with you in this sense: a LOT of retirees are coming down the pike and they were promised govt/utilities/construction pensions and health care and those funds are underfunded. Property taxes that pay govt retiree costs arent included in inflation figures but those increasing prop tax bills will work their way thru.
Keep telling people to not believe their own lyin’ eyes. That’ll work for sure.
Wendy is offering Dave’s double at $2 and Dave’s single at $1 … and it is doing fine as a restaurant chain.
Huh? Here in Florida those burgers are on the order of 5-8 dollars depending on whether you are getting a single or double.
You have a time machine you are hopping into to get 1 and 2 dollar burgers because I can’t even buy the ground chuck at that price (ie it’s at least 4 / lb so a 1/4 lb burger costs 1 for just the beef part).