McDonald’s Does Exactly What Anyone Who Understands Economics Said Would Happen.
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.
Inflation notches fresh 30-year high…
- Headline inflation, including food and energy, rose at a 4.4% annual rate in September, the fastest since 1991.
- Core inflation, which is the Fed’s preferred gauge, increased 3.6% for the 12 months, the same as in August but still also the fastest pace in 30 years.
- Personal income declined at a faster pace than expected while consumer spending increased and was in line with forecasts.
- Employment costs rose more than expected and at the fastest annual pace in 19 years.
WASHINGTON (AP) — Wages jumped in the three months ending in September by the most on records dating back 20 years, a stark illustration of the growing ability of workers to demand higher pay from companies that are desperate to fill a near-record number of available jobs.
Pay increased 1.5% in the third quarter, the Labor Department said Friday. That’s up sharply from 0.9% in the previous quarter. The value of benefits rose 0.9% in the July-September quarter, more than double the preceding three months.
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