My primary job as professor is not to tell people what they already believe or want to hear. No, it is to shake my students to their very foundation,to push them outside their comfort zone. I force them to consider ideas they may not have otherwise considered, and then let them put themselves back together again.
Maybe they’ll wind up just like they were. And in a best-case scenario, they will wind up as a new and improved version of their former selves. It is not my purpose to make my students be like me, but rather to encourage them to grow, change, and evolve.
OK, end of disclaimer before we venture off into something that has been in the headlines for a while now. Inflation. Labor shortages. Calls for living wages. It’s enough to make an MBA’s head spin.
As it should.
This Just In…
In case you missed it in June, Chipotle announced it is raising its average starting pay to $15 an hour, but…and this is where the other shoe drops…it is also raising menu prices by 3.5-4%. And you would think, based on social media comments from the highly polarized peanut gallery, that the sky were either falling, or we are one step closer to ensuring that everyone has a shot at getting by regardless of job skills.
And this is where I have to mention that within my online course container, we all–I’m looking at my students–must treat each other with respect no matter how much we may disagree with their views. We can state our views, and hopefully support them with powerful evidence, but we cannot lose respect for one another. It is by considering the opinions of others that we can better form our own.
What’s In A Word?
So let’s get going. I am an ardent supporter of free markets. I am a capitalist, for whom the word “greed” is not a bad thing necessarily. It is the driving force that propels us to do better, to seek more, but at the same time, do so in a way that does not hurt others. I am not a fan of minimum wages, as I would rather let the market meet workers where they are, with (hopefully) particular skill sets. As members of a capitalist society, the burden is on us to acquire and hone job skills that are marketable in order to ensure our own survival.
Thus, I am fine with Chipotle and others raising their starting wages, especially since we have been faced with a severe labor shortage during and after COVID. When something is scarce, you have to pay more for it.
I am also fine with menu prices increasing, because you cannot expect companies to just absorb increases in their own factors of production. Labor, raw materials, general overhead–all of those things must be considered when setting prices. And let’s not forget returns for the investors, because it is with their initial money that the business has been able to operate.
Left v. Right
But to read the social media comments leaves me scratching my head at both the Left and the Right. If a burrito goes up by 40 cents and you can’t afford it, then maybe you should eat out less, or simply eat less. It’s no different from any other price increase, like gas. You consume what you can afford to do so. Thinly-veiled threats never to step foot inside a Chipotle again because of this are just silly.
And then there are those who incorrectly compare rising wages with such a small percentage increase in retail prices. They are not the same. Sure, those extra 40 cents may truly be a small price to pay to help guarantee someone has what is closer to that vaguely-postulated “living wage,” but they forget to consider that the one or more employees assembling my burrito are not taking an hour. They are taking minutes, and so to compare a wage increase on the hour to the price of something that takes only a small portion of it is to show a terrible misunderstanding of how math works.
Funny how denominators work that way.
The Wages Of Living
And then there is the implicit slippery slope of that “living wage” leading us inexorably toward UBI, or Universal Basic Income, which ensures that everyone will have at least some amount of money because they have a pulse. I’ll let you figure out where you stand on that one.
Meanwhile, I couldn’t care less if my burrito costs me an extra 40 cents. I will pay it. It’s not because I think the employees deserve more necessarily (and this coming from a guy who always tips 20-25% in sit-down restaurants because I feel it is my civic duty). It’s just that I recognize that the cost of business has gone up, just like for groceries, gas, furniture, and practically everything else in the last year. You have to pay to play. The wheels on the economic bus go round and round, and it is our job to keep from winding up under it.
Put that in your burrito and chew on it.
Dr “Make Mine With Black Beans And Rice“ Gerlich
