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The Cost of Your Cheap Services


One of the hallmarks of pre-pandemic life in the U.S. was a society where things that were once expensive became pretty cheap. Nothing was more emblematic of that than taxis, where Uber and Lyft drastically lowered the prices of rides. This was all done on a house of cards, as our Techbro Betters raised billions of dollars on the principle of losing boatloads of money on every car ride. But in any case, that was the reality. The rise of cheap was also borne by the working classes. We should remember this as we pine for the days of cheap Uber rides. It was also the days of bad work. Workers aren’t too thrilled about all of this and so we have seen this sort of spontaneous desire for better work arise during the pandemic, with government aid and time both leading many workers to try and find better options for themselves. For instance, for all the love white people to have their groceries delivered to them (I always wondered what it would take to get people of color into Whole Foods and of course the answer was white people paying them a pittance to shop for them), things such as online grocery shopping has a tremendous cost to workers. No wonder they want to find some other sort of work.

It’s important to realize the real cost of these cheap services.

The question of why things cost what they do can seem like a hazy one, or perhaps a way to get lost in a thicket of economic and accounting jargon. But a recent piece in The New York Times by Kevin Roose offered some insight. Looking at what he called “the golden era of the Millennial Lifestyle Subsidy”—think cheap, venture capital–subsidized gig platforms; delivery services; and offerings like Uber, Lyft, Airbnb, MoviePass, WeWork, etc.—Roose noted that many of these companies are now raising prices, hoping finally to capitalize on scale in exchange for revenue—and perhaps even achieve profit. Over the last decade, V.C.s “flooded these companies with cash, which often got passed on to users in the form of artificially low prices and generous incentives,” wrote Roose. “Now, users are noticing that for the first time—whether because of disappearing subsidies or merely an end-of-pandemic demand surge—their luxury habits actually carry luxury price tags.” Whereas tech-forward consumers were once able to summon a cheap black car on demand, now the pendulum has swung the other way. And once again, the attendant costs are being “passed on” to consumers.

But it’s not until the final paragraph of his piece that Roose addresses the labor exploitation baked into these models. Gig labor platforms gouge workers, keeping them precarious and underpaid, without benefits or protections of employee status—all facts that have been apparent and well studied for years. In some cases flagrantly defying the law, companies like Uber have largely done what they want, fattening themselves on cheap investment capital and leveraging workers’ desperation for any kind of paying gig in an attenuated economy that only works for the professional and upper classes. These corporate gains have been solidified by measures like California’s Proposition 22, which ensured that Uber doesn’t have to treat its drivers as employees, and the model is now being road-tested in legislatures and municipal elections nationwide. As the cost of an Uber ride increases, consumers might pay a little more, but the real losers are the people behind the wheel, who probably won’t see any more of that bigger fare.

From Chipotle to Uber, these are obvious examples of class war, of senior company leaders and influential shareholders continuing a decades-long tradition of underpaying frontline workers in order to reap the benefits for themselves. It is all the more insidious that when workers clamor for more—for dignity, union membership, personal protective equipment, and higher pay in workplaces that often remain dangerous—they are cast as malcontents or layabouts content to mooch off unemployment benefits. It doesn’t help that many lawmakers and corporate leaders don’t seem to recognize that places like Chipotle are not just boot-strapping opportunities for enterprising 20-year-old students. Increasingly, these types of jobs are full-time vocations for people who need to support themselves and their families. Various studies peg the median age of a fast-food worker as being around 28. The mean hourly wage for this group, according to the Bureau of Labor Statistics, is $11.80, which equals $24,540 a year.

These companies are industry-leading cash cows, and they can afford to do much more without using a justified wage increase as an opportunity to say that they must—they simply have no choice, you see—raise prices. Chipotle, whose head count is estimated at nearly 90,000 employees, has ample resources to pay workers more, preserve prices as they are, and still remain immensely profitable. Perhaps the costs would have to be “passed on” to someone else, but it needn’t be consumers on the receiving end. Chipotle executives and shareholders, instead, are the obvious candidates to take a small haircut on their already formidable earnings.

This leads me to one of the funniest conservative whine fests I’ve seen in quite awhile, an essay, if you want to call it that, in The Federalist about the slight rise in the cost of a burrito.

Chicken bowl, brown rice, black and pinto beans, pico, hot salsa, lettuce, cheese, sour cream — that’s all I want. And I want it for $7.60 plus tax. Thanks to the ill-named American Rescue Plan and remarkably short-sighted employment decisions, the federal government has jacked up the price of my Chipotle order.

Sure, the restaurant is the one raising its prices by about 4 percent, but the federal government is the cause.

Across the restaurant industry, chains such as Chipotle, Starbucks and McDonald’s have been increasing hourly pay for employees of company-owned locations in a bid to attract new workers and retain their current ones,” NBC News reported. “Consumer demand has come roaring back for restaurant meals, but the workforce has been slower to return, pushing eateries to sweeten the deal.”

Did you catch that? Restaurants have had to bribe current and prospective workers with fatter paychecks to lure them off their backsides and back to work. That’s what happens when the federal government steps in with a sweet unemployment deal, incentivizing workers do a little less labor and a little more lounging.

Under the CARES Act, the original coronavirus spending bill, the federal government handed out an extra $600 per week — with no eligibility requirements, meaning even millionaires could collect it — to unemployed people. According to a report from the Heritage Foundation, the average full-time American worker earning $48,000 a year would take home 15 percent more from unemployment under the CARES Act than remaining in his full-time job.

Someone actually was so shameless as to put their name on a piece complaining that the cost of their burrito had risen by 30 cents. Republicans are truly The Party of Ideas. In conclusion,

When the federal government pays restaurant workers to stay home, home is where many of them will stay. And when Chipotle needs to compensate for it by dangling a $15-an-hour wage in front of the low-skill teens who work there, the franchise will stuff that extra cost right into your burrito.

Chipotle broke my heart a little today, but big government is breaking my budget.

Maybe The Federalist should pay a living wage. Or maybe it is actually run by secret leftists, seeking to run the worst articles possible to discredit the entire fascist movement.

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