Chipotle has announced that it will be raising the lowest wage it pays to $15. Although Chipotle is raising wages to an amount many Democrats want to see as the minimum wage, they’re not doing that because of legislation forcing them to do so, although the artificial shortage of workers caused by Democrats dramatically increasing the pay out of unemployment checks is surely a factor.
Along with these rising wages, prices for customers are also rising. Estimates are that prices at Chipotle are going to rise about 4% because of the change. While this may appear small when quoted in terms of how much it’ll add to the price of a single menu item, if the price of everything you buy goes up 4%, 5%, or 10% (depending on the establishment) for everything, it’ll obviously be significant and noticeable. The price hikes would likely be larger if it weren’t for the current labor shortage.
The reason this is noteworthy is that Chuck Schumer is still out there pushing the Raise the Wage Act in the Senate that would increase the minimum wage to $15 and as per usual, Democrats are trying to convince everyone that they can tinker with the market any way they choose without consequences. Unfortunately, that’s just not true or as we’re seeing with Chipotle, even necessary.
Why is Chipotle raising wages? Some of it could be PR, but the reality is that the demand for workers is high and so they’ve decided it’s worth it for them to pay more to staff their restaurants. Incidentally, one way you could increase demand for workers and thus, wages for poor employees across the country would be stopping illegal immigration. On the other hand, bringing in more illegal aliens reduces the demand for workers and thus, worker pay.
Of course, that’s just a side note. The reality is that when a business is forced to pay more for labor by the government, it’s unlikely to simply eat the cost being imposed on it and there are only a handful of ways it can respond. If it can’t handle the increase, it goes out of business. The business can also cut labor costs by firing employees, not hiring them to begin with, or finding a way to replace them, possibly through automation. Other businesses, like Chipotle, may choose to pass those new cost increases on to their customers. If enough businesses do that, you’ll see inflation that eats away a lot of the gains those employees are making.
That’s why, as per usual, the Democrats have it backward on a minimum wage. The focus shouldn’t be on increasing the wages of employees, it should be on finding ways to help employees become more valuable. The more experience, training, and skills a worker has, the more valuable he is to a company, and thus, the more he is going to be paid.
John Hawkins is the author of 101 Things All Young Adults Should Know. You can find him on Parler here and on Twitter here.
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