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Burrito Economics: Republican Claims About Price Increases Don’t Hold Up

Robert B. Reich, Tribune Content Agency on

House Republicans are blaming Democrats for the rise in Chipotle burrito prices.

You heard me right. The National Republican Congressional Committee (NRCC) issued a statement Wednesday claiming that Chipotle’s recent decision to raise prices on its burritos and other menu products by about 4% was caused by Democrats.

“Democrats’ socialist stimulus bill caused a labor shortage and now burrito lovers everywhere are footing the bill,” NRCC spokesperson Mike Berg said in the statement.

Apparently Republicans have finally found an issue to run on in the 2022 midterm elections. Dr. Seuss and Mr. Potato Head weren't gaining enough traction.

The Republicans’ tortured logic is that the unemployment benefits in the American Rescue Plan have caused workers to stay home rather than seek employment, resulting in labor shortages that have forced employers such as Chipotle to increase wages, which has required them to raise their prices. Hence, Chipotle’s more expensive burrito.

This isn’t just loony economics. It’s dangerously loony economics because it might be believed, leading to all sorts to stupid public policies.

 

Start with the notion that $300 per week in federal unemployment benefits is keeping Americans from working.

Since fewer than 30% of jobless workers qualify for state unemployment benefits, the claim is that legions of workers have chosen to become couch potatoes and collect $15,000 a year rather than get a job.

I challenge one Republican lawmaker to live on $15,000 a year.

In fact, evidence suggests that workers are holding back from reentering the job market because they don’t have child care or are still concerned about their health during the pandemic.

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