Burrito Economics

The minimum wage went up in San Francisco and, blaming the cost of doing business, the overrated burrito hucksters at Chipotle hiked up their prices. Predictably, conservatives popped their collective gaskets, and everyone on the right started screaming “ENJOY THE BITTER FRUITS OF YOUR COMMUNIST WEALTH REDISTRIBUTION, LIBTARDS”, as if having to pay a dollar more for a mass-market fast food item in a city that is famous for having good burrito joints on every corner is the first horseman of the apocalypse.

This is all very comical. Since the single consistent goal of the right is to keep labor as close to a condition of slavery as possible, you hear this kind of thing any time there is even the slightest attempt to help out the working class: raise their wages by even a penny and we’ll soon be paying $300 for a gallon of milk, for which we will have to stand in line in the freezing cold outside of an abandoned Soviet-era factory. Never mind that raising wages for the working class gives them more money to pump back into the economy; give them anything even close to a living wage and we’ll all be building castles made out of worthless currency, like in Weimar Germany.

The thing is, it’s in no way clear that raising the minimum wage increases the overall operating cost of businesses, or that it causes inflation, or any of the other pernicious myths that the right employs to keep poor people as poor as possible.  The right knows this, and they are used to lying about it:  when I was living in Seattle, and a minimum wage increase (spearheaded by socialist council member Kshama Sawant) went through, the usual suspects went ballistic, claiming that the minimum wage would kill the city’s booming restaurant industry, and that it had already caused various eateries to go out of business even though it hadn’t even been instituted yet.  It scarcely even needs to be said that this was complete bullshit.  It’s true that raising the minimum wage can have unpredictable results, but the idea that it’s a universal, across-the-board job killer is just a flat-out lie designed to preserve a status quo where CEOs are compensated at rates that would make the Roman emperors blush.

In fact, that’s one of the most entertaining parts of this whole affair.  Chipotle CEO Steve Ells also got a pay hike last year, at 15% much more substantial than that of his minimum wage workers.  His pay went up to $28.9 million a year (excluding bonuses and stock options), an increase of $4,335,000.  To put this in perspective, Ells could cover the minimum wage increase for every single one of Chipotle’s San Francisco employees out of his own pocket, just using the amount of money he got as a raise last year, and still have a couple million left to burn.  He wouldn’t even have to dip into to his salary.  (And that’s assuming that all of the employees work a 40-hour week every week of the year, which is an overestimation of Goliath-sized proportions.  Despite lots of good PR from the gullible, Chipotle follows in the footsteps of most big corporations in cheating its employees out of wages and finding ways to avoid its legal obligations to them.)  It is typical of the way the American class system has been upended by capitalist propaganda that we don’t even blink when a CEO gets a 15% pay raise over his previous income of more than any human being could need in a lifetime, but when a worker gets a 10% pay raise that will barely make a dent in his ability to live day to day, we act like the end of the world has arrived.

And therein lies one of the key tempests in this particular teapot:  the Chipotle wage increase/price hike isn’t just happening anywhere.  It’s happening in San Francisco, the incubator for the new economic order, the place where the ‘sharing economy’ — which abandons the very notion of having a steady, full-time job with decent benefits and wages in favor of reducing every worker to a constantly-hustling micro-entrepreneur forced to monetize every aspect of her existence to survive — is king.  The median rent in SF at present is a staggering $4,225 a month, meaning that even with the minimum wage increase, it would take three Chipotle employees working full-time to have enough for an apartment, with pretty much nothing left over for other expenses.  The hugely overinflated rent costs also apply to businesses, and Chipotle is paying far more for those primo locations in San Francisco than it is its labor force or its ingredients.  It’s no surprise that in the land of Uber, Taskrabbit, and Instacart, people are all too willing to believe that it’s the foolish old-model workforce, abetted by a stubborn government-mandated minimum wage, that’s driving up prices, instead of the greed and bad decisions of corporate bigwigs.

We’ve swallowed, along with Chipotle’s rice-crammed food tubes, the big business lie that workers, not executives, are the overpaid ones, and we’re so accustomed to the idea that risk should be made public and profit should be made private that we don’t even blink when a corporation lies to us about why they’re raising their prices.  No matter how many collusion findings, class-action verdicts, and price-fixing scandals take place, we still believe the richest people in the world when they tell us they are just the innocent victims of avaricious, lazy workers and benighted government meddling.  Well, how’s this for a deal?  The bosses always telling us that if we don’t like our wages, we should just work harder or get a better job.  How about we tell them that paying the legal minimum wage is part of the price of operating a business, and if they don’t like it, they can do what all the rest of us do and go work for someone else instead of sitting in the executive suite.  I’m sure there’s plenty of fast food restaurants who would be happy to hire a go-getter like Steve Ells, and he’ll be thrilled to hear that many of them pay a lot less than San Francisco’s minimum wage.  If the heat’s too much in the boardroom, he can get back to the kitchen.

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