Expensive Epidemic: Rising Costs Plaguing The Food Industry

Imagine you’re working at a restaurant, barely scraping by with the amount of money you’re getting paid, penny pinching to save from your meager paycheck. With your savings account getting emptier and emptier, your 9-5 is your only source of income. Your lifeline seems to be holding on, then- BAM! COVID hits, and mass shutdowns occur throughout the country. Out of a job, seeing the end of your savings, you spend the rest of the lockdown eating scraps out of your parents’ fridge. Finally, the lockdown ends and you decide to grab some fast food for the first time in ages just to find exorbitant prices! $10 for a burger and fries, $20 for a large pizza. You look in your wallet to find a lack of bills above a five. You barely scrape together enough to pay for an order of fries and a soda, then slump off to eat in a booth all alone. This scenario may be hypothetical, but it’s an experience many Americans have undergone in the past few years.

The COVID-19 pandemic started a domino effect that has rippled throughout the American economy. Supply chain issues caused by overloaded ports, inflation due to skyrocketing demand compared to supply, a post pandemic labor shortage, and all sorts of other problems. These have created increasingly high prices in both the restaurant industry and all retail.The result has been catastrophic, with wallet-gouging purchases becoming commonplace. With many products and services becoming more expensive, wages feel exceedingly insufficient by the day. Fur- thermore, Consumers aren’t the only ones feeling distraught over surging costs. Chris Logue has been a manager at Pinthouse Pizza for the past four years. Regarding costs, Logue describes his experience over this time : “I’ve been here for years and we’ve put our price up a couple of times before now- we’ve had to raise the prices to keep up with everything. Especially since certain products we use have gone up a lot.” Despite the price hikes, Chris is thankful that the financial situation at Pinthouse is still relatively tame: “I think we’re lucky that we were already able to raise our prices since they were already pretty low. Thankfully, most people have been pretty understanding with the price raises, so it hasn’t affected business too, too much.” Additionally, Pinthouse benefits from the fact that they’re a brewpub, which means their license requires them to have 51% or more sales in food, and in return, they’re allowed to sell alcohol. Beer has a higher profit margin than food, so they’re able to withstand more disruptions in their business before any issues occur.

However, some businesses can’t afford the leisure of raising prices that Pinthouse can. Shirley Yang co-owns a food truck, Song La, along with her husband. They first opened in the UT co-op during 2015, and now they operate and are located inThicket Food Trailer Park. All of the rising costs recently haven’t treated their business kindly. “We’ve been considering for the past two years if we wanted to close the business because of the recent price increases in the economy. Since, the prices of ingredients have been getting higher and higher, it’s been harder to do business,” Yang explains, “if we go any higher in our price, we’ll be selling food at restaurant prices, but we aren’t a restaurant so we can’t afford to compete with them for business.” They’ve worked hard to keep the cost of production as low as possible. In fact, everything they do is on their own- from buying ingredients, to food prep, and even cleaning up after hours. “On any given day, although I’m only open for a couple hours in the afternoon and night, I end up having to work upwards of 6-8 hours more- so 10-12 hours in total when it comes to work hours in a day,” said Yang. Due to constantly juggling both work and taking care of her two children, who are still in elementary school, she only gets to relax a little on her days off before getting right back into business . She spends upwards of 60 hours each week toiling away.

Prices of ingredients aren’t the only thing that’s gone up- costs of labor have significantly increased as well. “Generally as a business standard you have 20% or 30% of your money going towards labor,” Logue reveals. “While it’s cheaper to pay front of house staff, as they receive tips and such, all of our back of house staff are salaried, earning a flat sum.” Texas’s minimum wage for regular employees is $7.25, with front of house staff minimum wages being even lower, at $2.13, as long as they make tips up to $7.25. If not, the company has to reimburse the worker up to minimum wage. However, these numerics can barely be classified as livable wages, so restaurants often have to pay a lot more than that to incentivize employees to work for them. This is especially prevalent in non-fast food industries, where people that work in the kitchen have to be professional enough to create restaurant-quality food. With large fast food chains, there’s another issue. In order to work with food in this industry, all employees are required to get a food handlers license. Jeff Salazar,

Assistant Manager at

Schlotzsky’s, shares information on the topic: “In terms of having a food handlers license that costs about $79, and it’s up to the employee to grab it, or else you can’t work because you have to have a license to just touch around. It’s up to the employees in general for pretty much any job.” That can be an extreme turn-off for new workers looking to get into the industry, forcing companies to have more enticing wages to get adequate employees.

Despite all the hard work and rough times financially, COVID has brought us more appreciation for the little things in our world that we take for granted- like human interaction. When asked what the favorite part of their jobs were, both Logue and Yang replied that being able to interact with humans was the best part.

Being able to talk to all the customers and being able to meet so many new and different people from so many different cultures is just amazing, and through the interactions with these different people every day I’m also able to make new friends with a lot of people in the community.

Inflation in the American Economy (%)

What Causes Inflation?

Before we answer what causes inflation, first we must ask: What is inflation? Inflation is oftentimes defined as a general rise in prices across an economy. While a small amount of inflation is oftentimes harmless- or even a sign of growth within an economy, However, too much of it in a short period of time can render your hard earned money less valuable, making it harder to make a living. Inflation is caused by a rise in demand while a lack of supply persists. Because the amount of people who want to purchase certain goods is higher than the relative amount of goods are being brough into the economy, we are left with things costing more and more.

Science Behind Rising Prices

How does Inflation Affect Prices?

As inflation effectively decreases the value of your cash, it indirectly affects the cost of goods and services. However, due to inflation being a statistic of sorts of the rise in prices across an economy, it would be more accurate to describe it as what has happened to cause the rise in prices. The initial spurt of inflation was caused by COVID-19, which induced many issues within the supply chain, which meant the supply was lower than the demand, meaning prices of goods went up. To compound that, since the value of the money is lower, the cost for wages also becomes higher, further increasing the prices and leaving a self-promoting cycle.

Menu Price Comparisons Month by Month (%)

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