According to the latest Consumer Price Index data from The Labor Department, it has never - ever - been more expensive to "dine out" relative to "eating at home."
In December last year, in another instance showcasing the real intellectual capacity of career and academic economists and those clueless enough to listen to them, we warned repeatedly that even the smallest of mandatory wage hikes would ripple through the economy and unleash extensive price increases across the board, not to mention countless job cuts as small and medium business, already struggling with keeping profits from plunging, had to find ways to eliminate overhead or raise prices.
As a result of this latest forced governmental intervention into the economy, everyone would be far worse off.
But while we had seen isolated cases of mostly food sector companies push prices higher, so far there has not been a coordinated industry-wide effort that will see a sizable impact on food inflation. This will change for New Yorkers starting on January 1, when the cost of a night out in the Big Apple is about to get even pricier.
As the Post reports, NYC diners can expect their restaurant and bar tabs to rise as much as 10 percent, plus tips, as restaurants seek to protect their profit margins from mandatory wage hikes; some eateries will eliminating tipping entirely - that primary source of incremental wages for thousands of food industry workers - and are hiking base prices by as much as 30%, with the money going toward higher payroll.
And so, here we are a few months later... and the cost of "eating out" is exploding relative to a home-cooked meal...
As Bloomberg adds,
The Labor Department’s latest consumer-price data show the difference between the index of food costs away from home and the measure of inflation for home-cooked meals is the largest in records back to 1953.
The widening began in earnest around the start of the third quarter of 2015 just as gasoline costs slid, indicating restaurants were confident higher menu prices would stick... presumably to cover higher payroll costs.
Finally, we leave it to SprottMoney.com's Nathan McDonald to explain how the minimum wage is a curse, not a blessing...
Central planners and politicians have no clue when it comes to creating wealth. They are incapable of creating growth and a productive economy, despite what they would have you believe.
The government cares about one thing above all else: expanding itself and its power. One of the methods in which they have done this through history, up until the point in which it becomes so bloated it implodes on itself, is through the expansion of social welfare programs.
In the West, a large portion of the population now finds itself stuck in this very cycle, the social welfare cycle, which is the doom of all established economies – the cycle of "why should I work if I can make more money sitting at home?"
The logic is sound; you can't entirely blame those for thinking this way, as it is only human nature to take the easy way out, no matter the cost to our future or the wellbeing of generations down the road.
The biggest challenge for government is how to expand this dependant class, while making it seem to the rest of us (who support the welfare class) that this is not their intention. One stealth method of achieving this end goal is through the nefarious "minimum wage."
To the naked eye, minimum wage is a great thing. Yet to those of us who are awake and understand basic economics, we know that this has been one of the great blights in the West and has hollowed out our manufacturing base and shipped untold jobs overseas.
Minimum wage forces companies, such as McDonald’s, to come up with newer and newer solutions to replace humans in the work force, pricing people out, as politicians raise the bar ever higher, making it less and less feasible to hire people to do jobs. It becomes cheaper and cheaper to replace workers with machines.
In some cases this has led to great innovations, yet in others it has been a great detriment to mankind, putting many out of the workforce and causing vast poverty in many sectors where there was once untold wealth.
This "pricing out" of mankind is happening in many industries, with McDonald’s, for example, making it very clear that they will be replacing much of their workforce with machinery as the minimum wage price goes up. This will add no increase in service to the customer, but will place much more stress on our already fragile system.
I have seen this first-hand. In Canada there are numerous "self-checkout" McDonald’s kiosks, where only one staff member can be seen on the front line, and the rest are represented by machines with which you fill out and pay for your own order, interacting with barely anyone during your experience there.
This is the way of the future, as politicians continue their war on the working class, while "acting" like our saviors and demanding a raise in the minimum wage. A raise – as anyone who understands economics 101 will understand – that will not bring more prosperity, but only inflation, wealth destruction, and misery. Good job, mission accomplished.