Chipotle bumps pay to 15$, adds benefits in push to hire 20k(linkedin.com)
linkedin.com
Chipotle bumps pay to 15$, adds benefits in push to hire 20k
https://www.linkedin.com/news/story/chipotle-bumps-its-average-pay-4401161/
58 comments
On the flip side the costs of many essentials are going up and the fewer people employed at the higher prices will be buying less with their 2021 $15 than they could've with their 2019 $15, but if people are satisfied with simply seeing a higher numerical value on their paycheck so be it.
https://www.wsj.com/articles/consumers-adjust-to-higher-pric...
https://www.wsj.com/articles/consumers-adjust-to-higher-pric...
> 2021 $15 than they could've with their 2019 $15
Still far more than they would have been buying with the $7.25/hr of course.
These wage increases are almost certainly net welfare enhancing due to diminishing marginal utility of the dollar.
Still far more than they would have been buying with the $7.25/hr of course.
These wage increases are almost certainly net welfare enhancing due to diminishing marginal utility of the dollar.
Not to mention, the Fed has tools to counter inflation, which they will almost certainly deploy.
Not if Powell refuses to acknowledge inflation is happening, or will be soon. https://www.pbs.org/newshour/economy/chairman-powell-says-fe...
CPI is the benchmark against which inflation is measured. It's the definition, so if CPI isn't going up, there's nothing to acknowledge. IMO it will go up, there will be a transient spike that will dissipate.
You're at least half-right, CPI did go up...
https://news.ycombinator.com/item?id=27129927
https://news.ycombinator.com/item?id=27129927
Yup but the 2% target is over a long timeframe. Transient spikes are fine. There was a big drop last year.
Whether the current spike is "transient" is yet to be seen
Ah yes, the perennial HN "secret inflation" theory
It's no secret my friend. Look around, prices for pretty much anything you want to purchase are higher. Gas, houses, lumber, CPUs, food, cars.
Unilever: https://www.just-food.com/news/unilever-experiencing-worst-i...
https://www.bloomberg.com/news/articles/2021-05-04/inflation...
https://finance.yahoo.com/news/here-are-17-food-companies-th...
Unilever: https://www.just-food.com/news/unilever-experiencing-worst-i...
https://www.bloomberg.com/news/articles/2021-05-04/inflation...
https://finance.yahoo.com/news/here-are-17-food-companies-th...
You're not going to convince me about macroscale inflation by linking to price increases by individual firms.
https://fred.stlouisfed.org/series/T10YIE
https://fred.stlouisfed.org/series/T10YIE
Did you notice inflation 5x'd in the past year, according to the link you just posted?
Just look at a larger timescale. All of this is consistent with average inflation targeting of 2%, ie. The fed mandate.
Prices now are entirely consistent with average 2% inflation during the course of the last two years, it only increased so much due to prior sharp decreases in inflation.
Prices now are entirely consistent with average 2% inflation during the course of the last two years, it only increased so much due to prior sharp decreases in inflation.
Riiiight... supply shocks, labor shortages, free government money, panic buying, shipping constraints, raw input prices, energy instability, all have nothing to do with the highest inflation print in nearly a decade. It's all just "prior sharp decreases." Gotcha.
Supply shocks definitely have to do with the month-over-month phenomenon. But I don't see how you can look at that graph and not see the obvious correction for a massive downtrend in inflation pretty much exactly a year ago.
Whatever, the more people who have a bad mental model of what's going on, the more I make on the stock market, so it's NBD. I would actually encourage you to bet lots of money on your beliefs, it's just another opportunity for arbitrage for me and the institutional investors who know how markets work.
Whatever, the more people who have a bad mental model of what's going on, the more I make on the stock market, so it's NBD. I would actually encourage you to bet lots of money on your beliefs, it's just another opportunity for arbitrage for me and the institutional investors who know how markets work.
Inflation has been capital's Boogeyman for the middle class since the 80s
I always found inflation to be this arbitrary intangible number. Consumer price index is probably a better metric here than inflation for majority of Americans. Basically comparing how much the price of stuff people spend money on is increasing vs how much their income is increasing.
Noob question: What does that consist of (other than halting currency printing)?
The Fed doesn't print currency - thats Treasury, although the Fed holds and distributes it to depository institutions! They control the money supply by reducing the fractional reserve lending rate at banks (reducing supply of loans), increasing interest rates (reducing demand for loans) and unwinding their balance sheet by selling back purchased assets (largely t-bills, reducing circulating supply directly).
The money supply of centrally banked economies is mostly debt/demand driver, not supply driven. Money is created when lent, and destroyed when repaid. By tweaking parameters, the Fed is able to manage circulating supply.
It's actually a really elegant system, IMO.
The money supply of centrally banked economies is mostly debt/demand driver, not supply driven. Money is created when lent, and destroyed when repaid. By tweaking parameters, the Fed is able to manage circulating supply.
It's actually a really elegant system, IMO.
The last sentence is only true if you believe the Fed will actually sell back the assets. When I look at this chart, https://fred.stlouisfed.org/series/WALCL, I have very little confidence that the Fed will sell a meaningful portion back (notice the Fed already gave up BEFORE covid when we supposedly had one of the best economies in recent times). In fact, it looks to me that the assets held by the Fed are growing exponentially and definitely growing faster than our productivity growth.
2018 to 2019 was a 15% decrease of the Fed's balance sheet. That was actually quite a decent pace.
At $0.6 trillion/year it would take 12 years to unwind the 2021 balance sheet. That's worrying but not impossible.
At $0.6 trillion/year it would take 12 years to unwind the 2021 balance sheet. That's worrying but not impossible.
Paradoxically, the default state of fiat currency is deflation, because the primary means of money creation is debt. If inflation is 2% every year that means future debts must overshadow past debts. If you raise interest rates people stop borrowing money because it becomes too expensive. The interest rate itself acts as a productivity gate. "You must be this productive to obtain financing." If you stop borrowing money, then the only place for the money to go is to pay off debts, which contracts the money supply and you get deflation which is strong enough to counteract past inflation. The vast majority of dollars were "printed" this way.
It seems to me that printing money must at some point cause significant inflation. I might be right or wrong.
But I see no connection between that and generous unemployment benefits, since they are a drop in the bucket compared to the trillions spent on other things.
But I see no connection between that and generous unemployment benefits, since they are a drop in the bucket compared to the trillions spent on other things.
How is it good for the economy? We claim we need all this help from Mexico but then we have to pay people here to? The reason why dems deny it is because they also know it’s a horrible idea.
We claim what now? Mexico didn't ever pay for the wall, if that's what you mean.
I think the economy should be good for society, and that people should be able to prosper if they work, having enough money to pay the costs of the things they need, like food, medical care, etc. I don't feel like there should be a permanent underclass of people who can never get ahead because they are living paycheck to paycheck.
I think the economy should be good for society, and that people should be able to prosper if they work, having enough money to pay the costs of the things they need, like food, medical care, etc. I don't feel like there should be a permanent underclass of people who can never get ahead because they are living paycheck to paycheck.
I do not know what “good for the economy” means, but reducing the income/wealth gap is good for society. The upper deciles have had a nice few decades where they have been able to reap the rewards of productivity gains and cheaper prices due to lower wages.
Consider this. The maximum possible pay Person Y can obtain in the current market is $20 per hour. However, cutting unemployment pressures this Person to get a $15 per hour job immediately.
For the sake of the argument lets assume that unemployment benefits give $15 per hour. Those $15/h represent $15/h of pure waste because they have to be paid by employed people.
However, someone using unemployment benefits to obtain the $20/h job implies that taking the $15/h job wastes $5/h of your potential and unemployment increases your future potential by $5/h.
Those $5/h are pure waste, nobody gets them, not even your boss because an employee working in a fast food restaurant can generate less economic value than an employee in a warehouse.
However, unemployment generally lasts as long as necessary. Only a handful of individuals live on unemployment benefits over the long term. If you are unemployed for 6 months you cost the state $14400 (assuming $600 in benefits per week and 4 weeks per month for simplicity). It takes $14400/$5/h = 2880 hours of the warehouse job to break even from a macro economic perspective or 1.6 years with 1800 working hours per year. Of course this is not the actual tax revenue, assuming 27% of GDP is evenly taxed it would take 6 years to break even for the government.
This is just a potential benefit from the "unemployment benefits cause a worker shortage" perspective. If you go one step further there are even more situations in which unemployment benefits can help the economy. For example, what if those people will stay unemployed anyway, even if you cut benefits? They still buy products and services that generate business revenue and the business can use the additional money to hire previously unemployed people.
Of course the ultimate underlying assumption behind everything I wrote is that the economy has an abundance of goods and high inequality. None of this would work in an economy with long term scarcity like a developing country. As it is right now, full employment in the US is a "bonus", the economy doesn't depend on it. Other countries are willing to do almost everything the USA can do but they do it cheaper, which negates the need for low skill jobs to be done in the US.
For the sake of the argument lets assume that unemployment benefits give $15 per hour. Those $15/h represent $15/h of pure waste because they have to be paid by employed people.
However, someone using unemployment benefits to obtain the $20/h job implies that taking the $15/h job wastes $5/h of your potential and unemployment increases your future potential by $5/h.
Those $5/h are pure waste, nobody gets them, not even your boss because an employee working in a fast food restaurant can generate less economic value than an employee in a warehouse.
However, unemployment generally lasts as long as necessary. Only a handful of individuals live on unemployment benefits over the long term. If you are unemployed for 6 months you cost the state $14400 (assuming $600 in benefits per week and 4 weeks per month for simplicity). It takes $14400/$5/h = 2880 hours of the warehouse job to break even from a macro economic perspective or 1.6 years with 1800 working hours per year. Of course this is not the actual tax revenue, assuming 27% of GDP is evenly taxed it would take 6 years to break even for the government.
This is just a potential benefit from the "unemployment benefits cause a worker shortage" perspective. If you go one step further there are even more situations in which unemployment benefits can help the economy. For example, what if those people will stay unemployed anyway, even if you cut benefits? They still buy products and services that generate business revenue and the business can use the additional money to hire previously unemployed people.
Of course the ultimate underlying assumption behind everything I wrote is that the economy has an abundance of goods and high inequality. None of this would work in an economy with long term scarcity like a developing country. As it is right now, full employment in the US is a "bonus", the economy doesn't depend on it. Other countries are willing to do almost everything the USA can do but they do it cheaper, which negates the need for low skill jobs to be done in the US.
Headline should clarify AVERAGE (not starting or minimum) pay = $15/hour. Lots of individuals will still earn less
> The wage increase for new and existing hourly and salaried employees will be implemented over the next few weeks, the company said. The upgraded pay scale will result in hourly employees earning starting wages ranging from $11 to $18.
...confirming my point
I wouldn't even call it average. In my experience most people will be getting $11.
My comment, claiming $15 was the average, was based off of the first sentence of the linked article: "Facing an industry-wide labor shortage, fast food chain Chipotle is bumping up its average pay to $15 an hour by the end of June, resulting in wages of $11 to $18 an hour"
Who would have thought.
Amongst all the companies complaining they can’t find workers, they seem to all maintain a truly massive cognitive dissonance and lack of complete self reflection.
Good for Chipotle for demonstrating actual leadership.
If anyone here is a fan of the tv show The West Wing, I always like the quote
Amongst all the companies complaining they can’t find workers, they seem to all maintain a truly massive cognitive dissonance and lack of complete self reflection.
Good for Chipotle for demonstrating actual leadership.
If anyone here is a fan of the tv show The West Wing, I always like the quote
You are so fond of calling yourselves the "leaders of the free world." So, lead.
https://www.adweek.com/brand-marketing/amazon-renews-call-15...
I'm no economist, but I'm pretty sure this just out prices small businesses. Bigger businesses can take the strain and get some great PR.
I'm no economist, but I'm pretty sure this just out prices small businesses. Bigger businesses can take the strain and get some great PR.
One could view this as the efficiency gains due to economies of scale being passed on to workers.
This sounds like capitalism at work! And, not in a bad way for once haha.
I've always found it interesting that the plague was one of the major drivers of the elimination of serfdom in western Europe. When half the population died, workers suddenly found themselves in high demand. They were able to demand better working conditions and dramatically higher wages. [1]
I'm hoping for a softer version of this in high unemployment payments.
Personally, I'm ok with business who can't afford to pay employees a living wage going under and being replaced by ones that are willing to.
[1] https://en.wikipedia.org/wiki/Consequences_of_the_Black_Deat...
I've always found it interesting that the plague was one of the major drivers of the elimination of serfdom in western Europe. When half the population died, workers suddenly found themselves in high demand. They were able to demand better working conditions and dramatically higher wages. [1]
I'm hoping for a softer version of this in high unemployment payments.
Personally, I'm ok with business who can't afford to pay employees a living wage going under and being replaced by ones that are willing to.
[1] https://en.wikipedia.org/wiki/Consequences_of_the_Black_Deat...
I like the result. It's long overdue. Without Covid things could have gotten worse over the short term.
However, I don't like the process. You can't just let the Fed/government follow a strategy because that strategy does not fulfill its stated goals which results in doubling down on the strategy. Increasing the money supply is only excusable if you do so to hit your 2% inflation mandate. The Fed needs more precise tools so that it can actually do its job without collateral damage.
Relying on the government to send economic stimulus only works when the government actually thinks that the economy is in big trouble. It's a good fail safe but it doesn't help when your economy is limping at a low growth and inflation rate for a decade. It's easy to shoot down a infrastructure bill if the only reason it exists is to add 0.5% inflation from 1.5% so that you hit 2%.
However, I don't like the process. You can't just let the Fed/government follow a strategy because that strategy does not fulfill its stated goals which results in doubling down on the strategy. Increasing the money supply is only excusable if you do so to hit your 2% inflation mandate. The Fed needs more precise tools so that it can actually do its job without collateral damage.
Relying on the government to send economic stimulus only works when the government actually thinks that the economy is in big trouble. It's a good fail safe but it doesn't help when your economy is limping at a low growth and inflation rate for a decade. It's easy to shoot down a infrastructure bill if the only reason it exists is to add 0.5% inflation from 1.5% so that you hit 2%.
I agree with you a good bit as well. This is a rare opportunity where employees have a slight upper hand and don't have to be dictated to for once.
I think what many businesses of all sizes often forget is that you get back what you give, usually as a multiple. Further, this increased return is often overlooked or ignored since its not immediately measurable until the action (increasing employees' pay) is taken. The flip side being, an increase in wages is an immediately determinable cost and so becomes the initial focus.
I think what many businesses of all sizes often forget is that you get back what you give, usually as a multiple. Further, this increased return is often overlooked or ignored since its not immediately measurable until the action (increasing employees' pay) is taken. The flip side being, an increase in wages is an immediately determinable cost and so becomes the initial focus.
You have a lot of down votes with no comments
A fair point. Perhaps it will also outprice other similar sized businesses too though
Chipotle has repeatedly been found to perform wage theft at scale, so let’s not get excited too quickly until the results are in.
IMHO, the problem here is they could have done this before. Forcing them to do so has wider implications for smaller companies, so maybe the real solution could have been some way to specify which kind of companies should have a minimum wage. I think Chipotle is in a position to do this while many other companies wil ljust have to eliminate positions.
The minimum wage already eliminates positions. It’s just that thanks to inflation, every year more and more tenuous jobs can be made available since the minimum wage doesn’t track the rising revenue.
Given enough time, the minimum wage would simply cease to be impactful.
We should reset the minimum wage to at least levels on par with what it would be inflation adjusted. That impact on the economy was the intention of the law in the first place. Jobs that are lost are jobs we never intended to exist in the first place.
Remember, you can still do lower than minimum wage work if you work for yourself. With a hiked wage, no longer will corporations be able to capture this section of the market, and instead small businesses can do it instead which would be more stimulative for the economy.
Given enough time, the minimum wage would simply cease to be impactful.
We should reset the minimum wage to at least levels on par with what it would be inflation adjusted. That impact on the economy was the intention of the law in the first place. Jobs that are lost are jobs we never intended to exist in the first place.
Remember, you can still do lower than minimum wage work if you work for yourself. With a hiked wage, no longer will corporations be able to capture this section of the market, and instead small businesses can do it instead which would be more stimulative for the economy.
Wasn't the original minimum wage meant to support a family on one income? Is that really a realistic goal in a modern two worker family setting?
I think this is looking at the situation a bit backwards.
Most families have both parents working so they can afford to live at the same level that a family in the past could afford with one working parent.
If minimum wage was meant to support a family where only one adult is working then we would in fact need to double it to really make it have the same effect it did in the past.
I'm not saying we should do this, just pointing out that raising the min wage is absolutely a worthwhile goal and so much value has been ripped away from the majority of Americans from inflation.
Most families have both parents working so they can afford to live at the same level that a family in the past could afford with one working parent.
If minimum wage was meant to support a family where only one adult is working then we would in fact need to double it to really make it have the same effect it did in the past.
I'm not saying we should do this, just pointing out that raising the min wage is absolutely a worthwhile goal and so much value has been ripped away from the majority of Americans from inflation.
I definetly agree with raising it, it's basically entirely useless right now as it's so low awful jobs already pay more than it anyway. it just seems trying to make it entirely inflation adjusted is ignoring the reality of women entering the workforce. I think two people working full time on minimum wage should be able to afford a stable family though.
Of those making the minimum wage or less, 62% are women and 38% are men.
If we have to think about women in the workforce, then let’s start by considering that the majority of people working awful jobs for awful are women and that even if they leave those jobs they still have a wage gap inflicted upon them.
The minimum wage is meant to help people by enforcing fairness, and in this case it will likely help women.
If we have to think about women in the workforce, then let’s start by considering that the majority of people working awful jobs for awful are women and that even if they leave those jobs they still have a wage gap inflicted upon them.
The minimum wage is meant to help people by enforcing fairness, and in this case it will likely help women.
I think it should have been written differently to begin with. I'm not a lawyer but they could probably target specific people to benefit from minimum wage (i.e. by age group), and/or have the minimum be a function of a number of factors. So minimum wage for a teenager with no kids is different than an adult with a family.
> Jobs that are lost are jobs we never intended to exist in the first place.
I'm not so sure of that, we couldn't possibly assess the full impact here, but I guess we'll see what happens. I would think constraining large companies only would be the solution here, and small companies have more options because presumably the employer and employee relationship is much tighter and they can sort things out better. Hope it works out for the best.
I'm not so sure of that, we couldn't possibly assess the full impact here, but I guess we'll see what happens. I would think constraining large companies only would be the solution here, and small companies have more options because presumably the employer and employee relationship is much tighter and they can sort things out better. Hope it works out for the best.
A number of businesses have signs on the doors saying they are hiring at $15/hr - I think Burger King, Home Depot...
It's disappointing that when Republicans say unemployment benefits are preventing people from going back to work, that Democrats just deny it - they should say "yes of course, that's the point!" And then go on to explain why it's good for the economy and idolatry of unemployment numbers is wrong.