House Republicans are blaming Democrats for the rise in Chipotle burrito prices.

You heard me right. The National Republican Congressional Committee (NRCC) issued a statement Wednesday claiming that Chipotle’s recent decision to raise prices on its burritos and other menu products by about 4 percent was caused by Democrats.

“Democrats’ socialist stimulus bill caused a labor shortage and now burrito lovers everywhere are footing the bill,” NRCC spokesperson Mike Berg said in the statement.

Apparently Republicans have finally found an issue to run on in the 2022 midterm elections. Dr. Seuss and Mr. Potato Head weren’t gaining enough traction.

The Republicans’ tortured logic is that the unemployment benefits in the American Rescue Plan have caused workers to stay home rather than seek employment, resulting in labor shortages that have forced employers such as 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 to stupid public policies.

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

Since fewer than 30 percent of jobless workers qualify for state unemployment benefits, the 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, evidence suggests that workers are holding back from reentering the job market because they don’t have child care or are still concerned about their health during the pandemic.

Besides, if employers want additional workers, they can do what they do whenever they need more of something: pay more.

It’s called capitalism. Republicans should bone up on it.

Chipotle wanted to attract more workers, so 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.

There’s no reason to suppose this wage hike forced Chipotle to raise the prices of its burritos. The company had other options.

Chipotle’s executives are among the best paid in America. Its CEO, Brian Niccol, raked in $38 million last year. All of Chipotle’s top executives got whopping 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.

I’m not going to second-guess Chipotle’s business decision — nor should the National Republican Congressional Committee.

By the way, I keep hearing Republican lawmakers say the GOP is the “party of the working class.” If that’s so, the Republican Party 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.

But don’t hold your breath, or your burrito.

Robert Reich, former U.S. Secretary of Labor, is professor of public policy at the University of California at Berkeley and the author of “The System: Who Rigged It, How We Fix It.”

(14) comments

MD1756

The problem is also when democrats refuse to acknowledge that some are staying unemployed because of the high pay for unemployment. Maybe some are working under the table while collecting high unemployment benefits. The unemployed can more afford to act on their fears when there isn't much difference between being employed and accepting some risk versus staying home. My older cousin in upstate NY is one who has chosen to stay home rather than look for a job while the unemployment is artificially high.

shiftless88

I am sure you can find examples of any concept. The point is not whether a few are, but whether this is the primary reason that so many places are having difficulty staffing up. People abuse nearly anything but that does not mean the majority of people are not benefitting appropriately. The problem is also when Republicans believe two isolated stories equals a trend.

MD1756

People generally should not have mowing grass, waiting tables, cleaning offices, etc. as a career especially if they intend on raising a family. That is a much larger problem than unemployment pay level. However, you are minimizing the problem by stating "two isolated stories equals a trend." What proof do you have that there are only two isolated stories of unemployment abuse? Your comment falls into that category refusing to acknowledge there is a problem. exactly how large the problem is, I don't think anyone knows, but it appears to be a significant problem including making it easier for someone to not work because of their perceived risks which may not match the real risks. Personally I think the government wasted money when it propped up businesses such as restaurants where they are not essential and we have plenty of them. Instead I've said before, the government should have used the money to provide the opportunity for those with little to no skills, to be trained in other areas where there are shortages of skilled labor and help raise the workers out of dead end jobs that should only be temporary entry level jobs and supplemental income jobs, not careers.

yogib

excellent article. of course most of the respondents seem to believe in low wages except for themselves.

garaclan

Wow, for a former Secretary of Labor, this article is surprising. He is either very ignorant of what he speaks, or is just trying to be a troll and spinning things to get people excited.

Some thoughts...

1. The $300 in ADDITIONAL federal aid goes on top of existing Unemployment benefits. Which means people are getting $730 a week, or almost $38K a year. So don't talk about living on $15K.

2. Intellectually honest people realize the labor shortage is a combination of low wages, and the extra incentives not to work. Not to mention other factors. (Here is where the political commentators will swear it is all one or the other).

3. Of course CEOs make way too much money. But labor and wages are the biggest controllable expense for most companies, especially retail and service businesses. If Chipotle raises wages $2 and hour and their 85K employees work avg 20 hours a week, that will cost them an additional $176Million a year. (Not saying they don't deserve it, just saying it adds up).

I would expect better from a former Sec of Labor, but I guess in todays world it is too much to expect some honest conversation.

Awteam2021

To be perfectly honest, “ The $300 in ADDITIONAL federal aid goes on top of existing Unemployment benefits. Which means people are getting $730 a week, or almost $38K a year. So don't talk about living on $15K” that’s false, or at best, misleading.

For you to qualify for the maximum that unemployment insurance pays out you had to been earning a minimum of $47,000 annually while employed. Yes some qualify for the maximum payout but most don’t. Here the scale by state: https://bench.co/blog/operations/unemployment-benefits-by-state/

JaMar

I respectfully beg to differ with you. I think Mr. Reich is being honest and not at all misleading. To your point about people getting $730 a week...that is a small percentage of Americans. Mr. Reich pointed out "...fewer than 30 percent of jobless workers qualify for state unemployment benefits..." And no one is actually making $38K a year as they still have to pay Federal and state income taxes.

I agree with you that Labor is the biggest controllable expense in most organizations, and that should start with the management. So it seems likely that management at Chipotle is pocketing more than half that $176 million a year. If they gave it back, prices would only have to go up 2%, not 4%. If that math is correct, I don't think I like 2% of every burrito I purchase going into the pockets of Chipotle executives.

MD1756

I've solved the problem of supporting their management's salaries by not going to Chipotle. The last time I was there, the quality of their food was poor. The steak burrito I had was full of grizzle. I've never been back.

elmerchismo1

"Honest conversation" to you means agreeing with you.

artandarchitecture

Wow, Robert Reich is still alive. He and AOC, also an economics major, must have studied together.

Ocasio-Cortez Mourns Restaurant (where she worked as a bartender) Driven Out Of Business By Minimum Wage Law She Backs 8/21/18 Investors. com

https://www.investors.com/politics/editorials/ocasio-cortez-minimum-wage-jobs/

Hayduke2

Duh, given the article you quote do you think it might just be slanted a bit... PS - I don't like AOC or her "in your face" style...

artandarchitecture

Unable to examine facts when some opinion might also be peppered in too?

My condolences.

shiftless88

Restaurants go under all the time and it is fashionable for them to blame minimum wage laws. Yet restaurants all around them thrive under the same laws. That alone should tell you how FOS those claims are.

Awteam2021

Art, There are a total of 535 Members of Congress. 100 senators and 435 representatives. There’s a plethora of ideas in Congress but “the most” not in need far often have the greater say.

AOC’s platform - her efforts are focus on “the least”. Good for her. She’s greatly outnumbered in Congress by those that focus on benefiting “the most”. She slightly nudges the pendulum from “the most” having the only say to some interest in “the least” having a say. You got a problem with that?

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