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Chipotle Customers Will Suffer if $15 Minimum Wage Passes, Top Executive Warns

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This article is excerpted from the FEE Daily, a daily email newsletter where FEE Policy Correspondent Brad Polumbo brings you news and analysis on the top free-market economics and policy stories. Click here to sign up.

Progressive politicians and activists continue to clamor for a doubling of the federal minimum wage to $15 an hour. Critics often emphasize the millions of jobs that would be eliminated as a result. But a top executive from Chipotle is warning about another key consequence of a $15 minimum wage: customers will suffer.

Chipotle Chief Financial Officer Jack Hartung explained on a recent company call that they already pay $11-13 an hour, but being forced to increase wage rates to $15 would ultimately hit customers in the wallet.

“We’re not that far off of, for example, a $15 number,” Hartung said. “But let’s say that there’s going to be an across-the-board 10% increase in our wages. That would, to offset that with menu pricing, take us 2% to 3% price increase.”

Per Business Insider, this would mean the average Chipotle customer pays $0.20 to $0.35 more for a burrito. At first glance, that sounds small. But multiply a 3 percent price increase across the $6 billion in revenue Chipotle brought in during 2020, and you have roughly $180 million less in customers’ pockets next year.

What’s more, we have to factor this increase in costs across not just Chipotle, but the goods and services we depend on in a wide variety of industries.

“We think everybody in the restaurant industry is going to have to pass those costs along to the customer,” Hartung warned.

“Ultimately, in any business, the customer pays for everything,” Waffle House CEO Walt Ehmer added.

These companies aren’t outliers. From McDonald’s to The Cheesecake Factory, restaurants have routinely responded to past minimum wage hikes by increasing prices. Other crucial services like childcare will raise their prices due to minimum wage hikes, too.

So, if the push for a $15 minimum wage is successful, it won’t just destroy millions of jobs (although it’ll certainly do that!). Everyday Americans will pay the price at the register every day.

Like this story? Click here to sign up for the FEE Daily and get free-market news and analysis like this from Policy Correspondent Brad Polumbo in your inbox every weekday. 


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