There's Nothing 'Manageable' About Minimum Wage Hikes

The minimum wage isn’t a living wage. On that, I agree with those who want to raise the minimum wage. However, unlike them, I also recognize that it was never meant to be, either.

However, what’s troubling is just how many larger businesses are advocating for a hike in the minimum wage.

One of the latest is Chipotle.

Chipotle says raising its minimum wage to $15 an hour would result in a “manageable” menu price hike to handle the increase in wages.

The increase in menu prices would result in customers paying 2 to 3 percent more per meal, or about $0.20 to $0.35 extra, Business Insider reported.

Jack Hartung, Chipotle's chief financial officer, said the company already has an average $13 minimum wage so the increase would not be too drastic for the company. 

“But let's say, for example, that there's going to be an across-the-board 10% increase in our wages, that would have an impact on our margins of, call it, 150 to 200 basis points. And that would -- to offset that with menu pricing, that would take a 2% to 3% price increase,” Hartung told Business Insider.

“So all of that is very, very manageable,” Hartung said.

Now, that $13 average minimum wage at Chipotle isn’t a standard starting wage. It’s an average that takes into account places with relatively low wages and places that require much higher wages.

That said, if it’s so manageable to pay workers $15 per hour for Chipotle, then why aren’t they already doing it?

Of course, that’s a rhetorical question. They’re clearly not doing it because there’s no reason to do so. There are no requirements to pay that much and the labor isn’t actually worth that much.

So why are they making a statement like this in support of an increased minimum wage?

That’s easy. Competition.

See, while Chipotle is far from the biggest food chain out there, it’s still not a small entity. Yet every chain has to contend with at least part of their potential market share actually going to locally-owned small businesses.

Those are businesses that can’t weather such a substantial hike in the minimum wage. Most are doing good to keep employees and still make a profit—and no small business is going to keep going without making a profit. They can’t just jack up their prices enough to offset the increase in wages.

Chipotle, like most large chains, can leverage its size to reduce the costs of its supplies. Mom and pop stores, however, can’t. They simply don’t do enough business to justify similar discounts.

Couple that with increases in the minimum wage that Chipotle can handle, and it spells disaster for millions of small businesses. Along the way, it would destroy the hopes and dreams of an untold number of people.

Not that anyone gives a damn about those.

You see, as previously noted, the minimum wage isn’t meant to be a living wage. It’s a starting wage. It’s where you start out in the workforce. If you’re married and raising a family of four on minimum wage, you’ve clearly screwed up somewhere along the way. You don’t get to pretend to be the victim because you’re either too bad a worker to get better pay or too stupid to seek it out.

This push to raise the minimum wage, however, will create a whole new underclass of folks as more and more people will be earning the minimum wage.

However, prices will rise across the board. Everything from a hamburger at McDonald’s to the cost of a cart full of groceries will go up. So will the cost of power, internet, cable, cell phones, and everything else. After all, their costs will increase, which means they’ll pass it along to you, the consumer.

Over time, the cost of living will rise so that the new minimum wage is no longer a living wage…only we’ll now have millions more trying to live off that same minimum wage.

Please, tell me how that’s manageable?

Oh, for Chipotle, it is. For the country, it’s not.