Labor Shortage Sets Off “Inflationary Time Bomb” McDonalds Franchises Warn, Fearing Big Mac Price Hike

Labor Shortage Sets Off “Inflationary Time Bomb” McDonalds Franchises Warn, Fearing Big Mac Price Hike

An independent group of McDonald’s franchisees warns higher wages, signing bonuses, paid interviews are no longer working to attract new workers as generous unemployment benefits worsen the labor shortage, according to Bussiness Insider

The National Owners Association (NOA), an independent, self-funded advocacy group of McDonald’s franchisees, sent a letter to its members Sunday criticizing “hiring challenges on the “perverse effects of the current unemployment benefits.” 

The letter pointed to last week’s massive April payrolls employment miss, which consensus expected a whopping 1 million number, and some forecasters calling as high as 2+ million, were shocked with a 266k print. 

“What’s going on here? When people can make more staying at home than going to work, they will stay at home,” the letter read, which was obtained by Insider. “It’s that simple. We don’t blame them. We fault the system.”

The letter went on to say, “when higher wages, signing bonuses, paid interviews no longer work, we have a problem.”  

Neema Ardebili, the vice president of global franchise and strategic partnerships at ADP, told Insider that the working-poor collecting stimmy checks are making more money sitting on the couch than actually working. 

“Natural human behavior is to choose to receive more money while staying at home, than working for a highly demanding job — especially with the amount of stress that is being put on employees right now,” Ardebili said. 

NOA Board said franchisees must increase pay and benefits to attract workers. These additional labor costs will be passed onto the consumer in the form of higher Big Mac prices. 

“Inflation is the flip side to all of these changes,” the letter reads. “Price increases are happening everywhere you look and will continue as employers pass along these added costs. We will do the same. A Big Mac will get more expensive.”

“Our government officials need to know what is happening out in the real world,” the letter continues. “They need to know what they are creating; an inflationary time bomb.” 

Meanwhile, White House press secretary, Jen Psaki, is utterly oblivious to the unemployment benefits disincentivizing people from wanting to return to work. 

Peter Doocy battles Jen Psaki over whether the Biden administration’s massive unemployment benefits is disincentivizing people from wanting to return to work.

Psaki disagrees, citing the lack of “livable, working wage” in jobs, schools being closed, and expensive child care.

— Curtis Houck (@CurtisHouck) May 10, 2021

And now, President Biden is out Monday afternoon saying, “anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits.” It sounds like Biden is on damage control for his failed progressive policies. 

BREAKING: President Biden says “anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits.”

— Breaking911 (@Breaking911) May 10, 2021

What’s clear is that the White House will never admit their progressive unemployment policies, borderline universal basic income, have been a complete disaster as it has prevented a labor market recovery.

Now the Chamber of Commerce has urged an end to Biden’s pandemic handouts as “paying people not to work is dampening what should be a stronger jobs market and is hurting the overall recovery”…

… or listen to NFIB chief economist Bill Dunkelberg who said that “small business owners are competing with the pandemic and increased unemployment benefits that are keeping some workers out of the labor force”…

… or listen to restaurant legend Wolfgang Puck who said, “I don’t think we should pay people to stay home and not work if there are jobs available.”

To attract workers, low-income workers, mainly under the $40k per year mark, employers must offer higher wages and other benefits equal or greater to what the government is paying, thus creating soaring labor costs for labor-intensive fast-food companies that will pass along the costs to consumers. 

The Federal Reserve’s narrative that inflation is “transitory” is a load of crap. Prepare for much higher costs at fast-food joints. 

Bank of America recently warned clients: “Buckle up! Inflation is here.” 

Fast-food workers might get their wage increases in the short run, but in the longer run, this will force companies to quickly adopt automation and artificial intelligence to lower labor costs, displacing millions of workers this decade. 

Tyler Durden
Mon, 05/10/2021 – 20:10

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