Chipotle says raising minimum wage would mean ‘manageable’ menu price hike
Chipotle says raising its minimum wage to $15 an hour would result in a “manageable” menu price hike to handle the increase in wages.
The increase in menu prices would result in customers paying 2 to 3 percent more per meal, or about $0.20 to $0.35 extra, Business Insider reported.
Jack Hartung, Chipotle’s chief financial officer, said the company already has an average $13 minimum wage so the increase would not be too drastic for the company.
“But let’s say, for example, that there’s going to be an across-the-board 10% increase in our wages, that would have an impact on our margins of, call it, 150 to 200 basis points. And that would — to offset that with menu pricing, that would take a 2% to 3% price increase,” Hartung told Business Insider.
“So all of that is very, very manageable,” Hartung said.
There has been a fight to increase the federal minimum wage from $7.25 up to $15 an hour, but it has been opposed by Republicans and some Democrats who say it is too high of a wage hike for many areas.
Although Chipotle is a big company and can manage the wage increases, lawmakers warn small businesses might have more difficulty tackling a $15 minimum wage especially amid the financial troubles caused by the coronavirus pandemic.
“We think everybody in the restaurant industry is going to have to pass those costs along to the customer,” Hartung said. “We think we’re in a much, much better position to do that, than other companies out there.”
Sens. Mitt Romney (R-Utah) and Kyrsten Sinema (D-Ariz.), who both oppose a $15 minimum wage, presented a bill to increase the minimum wage to $11.
Many states already have raised the minimum wage from $7.25 and some states are already at $15 an hour.