Chipotle Hikes Prices in Response to Wage Increase

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Liberals, who operate in an economic vacuum much of the time, are already incensed at Chipotle’s decision to raise their prices by 14 percent in reaction to a minimum wage hike of exactly that amount. Who would have thought it? When companies are forced to pay wages that have nothing to do with the free market, they are simultaneously forced to raise prices to stay viable! Man, if only someone could have possibly foreseen such an unexpected outcome!

The Chipotle branches in question are in San Francisco, where voters recently cast their ballots for a $15/hour minimum wage. The wage increase is set to take effect in stages; the current minimum is $12.25 an hour, up from $10.75 at the start of the year. The trendy fast-food establishment has raised prices around the country, but most of the hikes have remained below a single percentage point. Only in San Francisco has the chain pushed their prices so high.

“We believe the outsized San Francisco price hike was likely because of increased minimum wages as well as scheduled minimum wage increases in future years,” an investment analyst said in a client note published by Investors Business Daily.

Chipotle spokesman Chris Arnold admits that these costs played a role in the price increases. “California, and San Francisco in particular, has a high cost of doing business,” Arnold told the Chicago Tribune. “In San Francisco for example, our occupancy costs are about double the Chipotle average as a percentage of sales, and our menu prices there are right around the average for Chipotle restaurants around the country, so increases to wages can have a greater impact than they might elsewhere.”

Higher prices at restaurants and retail outlets will of course worsen the overall economic environment in places where ridiculous minimum wage hikes go into effect. Businesses that choose not the raise prices will have to resort to other measures to keep themselves profitable. In many cases, this will mean employee layoffs, lower hours, and reduced benefits. Everywhere minimum wage increases have outpaced the federal standard, the effects on the economy have been detrimental. Yet somehow, voters keep falling for the same old tricks.

No politician wants to appear anti-worker, but sometimes you have to take an unpopular position if it happens to be the right one. Our economy functions best when there is as little government interference as possible. These liberal proposals play well to the ignorant, but they are unsound and disastrous when put into practice.