In order to offset increasing supply costs and wage increases, McDonald’s is increasing the prices on its menu, the Wall Street Journal reports.
According to the report, the price hikes come despite strong third-quarter sales, because wages at McDonald’s locations are up at least 10% in 2021. Prices have already gone up 6% this year, while supply chain issues are expected to cause a further 4% increase in prices.
The fast-food chain is also struggling to hire enough workers despite the increased wages.
McDonald’s is hardly alone. Labor Department data shows that companies worldwide are raising prices to make up for higher costs resulting from the supply chain crisis and wage increases.
“Many restaurants are raising menu prices to offset higher wages for cooks and servers, and rising costs for meat, packaging, vegetable oil, and other commodities,” the Wall Street Journal explains. “Chipotle Mexican Grill Inc., Del Taco Restaurants Inc., and Chili’s owner Brinker International Inc. are among the chains that told investors in recent weeks that they have increased prices to help cover costs.”
This is hardly shocking news. Anyone who understands basic economics can grasp that an increase in the costs of supplies and labor will ultimately drive up prices. This is a concept that proponents of the $15/hour (or higher) minimum wage repeatedly fail to comprehend.
Perhaps they’ll figure it out when they order a Big Mac and it’s ten bucks. Or maybe they won’t and they’ll see that as a reason to increase the minimum wage even more.
Source: PJ Media
