The Workplace Report

Black-Market Burgers? White Castle May Have To Raise Prices 50% To Cover NY’s $15 Min. Wage

white-castle-storeEconomics 101 does not seem to be either the SEIU’s, nor New York Governor Andrew Cuomo’s forté.

Meet the Law of Unintended Consquences

With the impending $15.00 per hour minimum wage Cuomo just foisted upon the State of New York’s fast-food industry, White Castle—the home of, perhaps, the most popular sliders in the Western World—is having a hard time trying to figure out how to adjust its business model to the higher wages.

…Cuomo’s idea of “economic justice” is a long way from the dollars-and-cents reality of running a burger business. If labor costs rise dramatically, White Castle will have to balance its books by raising prices or changing its business model so that it needs less labor.

“Is there any room to raise prices to cover costs?” Richardson muses. “We think we’d need to increase menu prices by something like 50 percent. It’s not something we’ve done before. It’d be catastrophic.”

[snip]

Richardson says — and common sense dictates — that if menu prices at fast-food chains shoot up by anywhere near 50 percent, many people will stop eating out as much, replacing trips to White Castle with trips to the grocery store. Customers can always vote with their feet and their dollars. [Emphasis added.]


Of course, if all fast-food restaurants have to raise their prices, and more people choose to eat home or take their lunches to work, that would mean much fewer fast food workers will be needed (or employed).

white-castle

A Black Market for Burgers?

Don’t worry, you die-hard White Castle lovers, if you absolutely cannot live without those delicious little sliders and can’t afford New York’s 50% higher prices, you can do what cigarette buyers do…get them in New Jersey. [Like cigarettes, White Castle sells their burgers by the carton full.]

White Castle New Jersey

[At least least New Jersey’s economic planners have not been as foolish as New York’s has….yet.]

Read more here.

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