A few weeks ago, I wrote a piece, “Fast Food Premium,” which argued that, as restaurants began offering higher wages and even signing bonuses to employees, those increased wages would get passed along to consumers, and would result in wider inflation (a big “thank you” to jonolan at Reflections from a Murky Pond for expanding upon the premise of my post with his own, excellent piece, “UBI —> UBM“). My observations might be deemed “prophetic” if they weren’t so blindingly obvious: higher input costs mean higher prices. That’s basic economics.
Of course, the ongoing labor shortage is not due to a booming economy, per se, but due to excessively generous federal unemployment benefits, which have effectively increased the minimum wage for restaurant employees: many such employees are paid more to stay at home, collecting unemployment, than they are to flip burgers, wait tables, etc. Mogadishu Matt highlights this phenomenon in a reblog of a John Stossel piece: the issue is not a labor shortage, but a problem of incentives.
