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Chipotle

Chipotle restaurant in Teterboro, New Jersey. (Photo by Michael Brochstein/SOPA Images/LightRocket via Getty Images)

Loony Economics: Republicans Blame Democrats for the Rise in Chipotle Burrito Prices

It would have been possible for Chipotle to avoid raising its burrito prices by paying its executives less. But Chipotle decided otherwise.

Robert Reich

 by RobertReich.org

Republicans have finally found an issue to run on in next year's midterm elections. Apparently Dr. Seuss and Mr. Potato Head weren't gaining enough traction…

"Democrats' socialist stimulus bill caused a labor shortage and now burrito lovers everywhere are footing the bill," said an NRCC spokesman, Mike Berg.

If wages at the bottom rise because employers need to pay more to get the workers they need, that's not a problem. It's a victory.

You heard that right. They're blaming Democrats for the rise in Chipotle burrito prices.

The GOP's tortured logic is that the unemployment benefits in the American Rescue Plan have caused people to stay home rather than look for work, resulting in labor shortages that have forced employers like Chipotle to increase wages, which has required them to raise their prices.

Hence, Chipotle's more expensive burrito.

This isn't just loony economics. It's dangerously loony economics because it might be believed, leading to all sorts of stupid public policies.

Start with the notion that $300 per week in federal unemployment benefits is keeping Americans from working.

Since very few jobless workers qualify for state unemployment benefits, the Republican claim is that legions of workers have chosen to become couch potatoes and collect $15,000 a year rather than get a job.

I challenge one Republican lawmaker to live on $15,000 a year.

In fact, the reason workers are holding back from reentering the job market is because they don't have childcare or are still concerned about their health during the pandemic.

Besides, if employers want additional workers, they can do what they do for anything they want more of but can't obtain at its current price—pay more. 

This is free-market capitalism at work…which Republicans claim to love.

When Chipotle wanted to attract more workers, it raised its average wage to $15 an hour. That comes to around $30,000 a year per worker—still too little to live on, but double the federal unemployment benefit.

Oh, and there's no reason to suppose this wage hike forced Chipotle to raise the price of its burrito. The company had other options.

It would have been possible for Chipotle to avoid raising its burrito prices by—dare I say?—paying its executives less. But Chipotle decided otherwise.

Chipotle's executives are among the best paid in America. Its chief executive, Brian Niccol, raked in $38 million last year—which happens to be 2,898 times more than the typical Chipotle employee. All Chipotle's top executives got massive pay increases. 

So it would have been possible for Chipotle to avoid raising its burrito prices by—dare I say?—paying its executives less. But Chipotle decided otherwise.

By the way, I keep hearing Republican lawmakers say the GOP is the "party of the working class." Well if that's the case, it ought to celebrate when hourly workers get a raise instead of howling about it.

Everyone ought to celebrate when those at the bottom get higher wages. 

The typical American worker hasn't had a real raise in four decades. Income inequality is out of control. Wealth inequality is into the stratosphere (where Jeff Bezos is heading, apparently).

If wages at the bottom rise because employers need to pay more to get the workers they need, that's not a problem. It's a victory.

Instead of complaining about a so-called "labor shortage," Republicans ought to be complaining about the shortage of jobs paying a living wage.

Don't hold your breath. Or your guacamole.


This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License.
Robert Reich

Robert Reich

Robert Reich, is the Chancellor’s Professor of Public Policy at the University of California, Berkeley, and a senior fellow at the Blum Center for Developing Economies. He served as secretary of labor in the Clinton administration, for which Time magazine named him one of the 10 most effective cabinet secretaries of the twentieth century. His book include:  "Aftershock" (2011), "The Work of Nations" (1992), "Beyond Outrage" (2012) and, "Saving Capitalism" (2016). He is also a founding editor of The American Prospect magazine, former chairman of Common Cause, a member of the American Academy of Arts and Sciences, and co-creator of the award-winning documentary, "Inequality For All." Reich's newest book is "The Common Good" (2019). He's co-creator of the Netflix original documentary "Saving Capitalism," which is streaming now.

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