Have Your Burrito And Eating It Too
The inflation discourse gets dumber, but there's an deeper insight
the truth about burrito prices
the poor get richer
if you wanted to complain about prices, burritos are a terrible choice, because the common’s man gain, is the un-common man’s pain (and it’s all according to plan)
zoomer discontent of the less-upwardly mobile
👉👉👉Reminder to sign up for the Weekly Recap only, if daily emails is too much. Find me on twitter, for more fun. 👋👋👋Random Walk has been piloting some other initiatives and now would like to hear from broader universe of you:
(1) 🛎️ Schedule a time to chat with me. I want to know what would be valuable to you.
(2) 💡 Find out more about Random Walk Idea Dinners. High-Signal Serendipity.The Great Burrito Debate Unfolds
There’s a truly silly debate raging amongst the commentariat, which in this case, includes the VP, over the price of burritos.
“Burritos are expensive.” “Stop whining.” “You’re Fat.”
We are all, now, more enlightened than before. Good times.
It’s unclear precisely what the debate is about, in that it’s probably not really about one thing. Are $20 burritos a thing? Is it a valid thing to complain about, and if so, who’s to blame? Should the burrito victim stop whining and just make their own homespun burrito, or is that hopelessly out of touch with the lived experiences of the common man struggling to afford lunch?
It’s all really a continuation of a chart-foul from last week, where someone stunned themselves into silence by their ignorance the nominal rise of grocery prices:
The horror of a 30% nominal price increase that is also a ~0% real price increase.
Ultimately, there is a nested argument here between rival factions of Tribe MAGA (but one that extends beyond that), which perhaps involves a reasonable grievance, but most definitely includes an hilariously poor choice of evidence to make the point.
For Random Walk’s purposes, it’s also an opportune teaching moment on the actual inflation story, which continues to unfold in its decidedly Random Walkian way (whether people are aware of it or not).
ICYMI
The Truth About Burrito Prices
First, let’s get the facts on burrito-gate itself:
According to data from the POS software business, Toast, and Chipotle’s own filings, burritos have gotten about 30% more expensive, which is precisely the same increase as wages for the burrito-makers (and wage-growth, more broadly).
Yes, sure, there is some regional variation, and QSR companies are very skilled at driving margins at the lesser menu items, like drinks, chips, fries, and the like. But, no, burritos are not actually more expensive (in real terms), nor are they particularly unique in the inflation story.
Still, longer-term readers see where I’m going with this. Obviously, burritos are not $20, but even if they were, the prime mover for the cost increase is wage increase. As Random Walk has quipped many times in the past, you cannot have your wages and eat them too.
The Poor Get Richer
And therein lies the rub for the particular combatants to this debate.
Wages, particularly for lower-end service workers, have been and will continue to be, the inflationary impulse that matters, such that we have one. The reason is that, unlike gas or memory chips, the driver for above-trend wage growth is a secularly tight labor market . . . kept even tighter, by the administration’s efforts to reduce the supply of net-new low-end service workers, i.e. closing the border.
Perhaps no single chart tells the story better than this one:
