The Chipotle Economy

Matthew Yglesias published a good piece this week explaining the economics that drive the expansion of the low-wage service sector. He used Chipotle as an example, explaining how the process of creating a burrito is hard to automate or export, yet remains stubbornly low-value.

Think about it. You, of course, can assemble burritos in a sweatshop in Cambodia, freeze them, put them on boats and trucks and then reheat them. But microwaved frozen burritos, though delightful when pulling an all-nighter in college, are fundamentally pretty gross. While I wouldn’t exactly say that you can’t replace burrito-making humans with burrito-making machines, I’m not sure anyone’s going to bother any time soon.

The problem is how to adapt to this shift. Instead of having an economy dominated by a large number of middle-income jobs with a few lows and highs, global capitalism is giving us a new paradigm. We have a remarkably large (and increasing) percentage of the workforce engaged in work that earns more than almost any jobs in past. But they are still a minority, maybe 15-25% of the workforce. For everyone else, the bottom has dropped out of the economy.

Yglesias’ prescription would make Republicans smile if they could manage to wipe the froth from their mouths and quit screaming hysterically about whatever paranoid fear has grabbed their attention at the moment. In a rare moment of clarity from the left, Yglesias tackles both income support and deregulation as twin prescriptions for poverty relief. This is trend that could bring left and right together toward something useful if we could seize on it.

Real wages and living standards have both a numerator and a denominator. The most sustainable way to tackle the problem of stagnating or falling working-class incomes is to work on the denominator—on the various regulatory privileges used by the wealthy and powerful to entrench their income and raise costs for everyone else. Snob zoning laws that keep mobile homes out of neighborhoods where land is cheap—and that dense apartment buildings and rooming houses out of places where it’s expensive—are a huge part of the problem. So are rules that make it harder to open new bars and restaurants, raising prices by reducing competition while also reducing job opportunities. Of course, taxing the rich to give everyone free money is also a great idea with a solid historical track record.

If, somehow, the Great Republican freakout could end before the Great Democratic Crackup begins, there are a lot of really frustrating problems that we could fairly quickly solve. What are the odds…

Chris Ladd is a Texan living in the Chicago area. He has been involved in grassroots Republican politics for most of his life. He was a Republican precinct committeeman in suburban Chicago until he resigned from the party and his position after the 2016 Republican Convention. He can be reached at gopliferchicago at gmail dot com.

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Posted in Economics
11 comments on “The Chipotle Economy
  1. bubbabobcat says:

    Des, des, des, you jes’ don’ unnerstan. It’s both. Situational ethics, situational facts, situational logic, situational reality,…

    As long as it’s alllllll warm and fuzzy inside.

  2. objv says:

    I’ve always loved Chipotle because of their emphasis on good ingredients and because they try to buy their meat from humane sources. After doing a little research, it appears they also treat their employees well.

  3. CaptSternn says:

    Seems that some people focus only on certain things, like being rich or being reduced to a worker at a fast food restaurant. There are a lot of decent to good paying middle class jobs. Jobs in construction, or even in the booming oilfields where they can’t find enough people to hire. There are professional jobs that don’t always require four years of college, or college at all. There are real estate jobs. Truck driving jobs. Many, many more examples, the list is long.

    But do we really have to discuss forced wealth redistribution and the fact that we already have minimum incomes for people that don’t even work, encouraging people to not work all over again? Or will the left stick with the idea of, “From each according his ability, to each according his need”? Got any examples where that worked out better than our capitalistic model based on limited government, individual liberty and rights?

    • texan5142 says:

      All things being equal .

    • desperado says:

      Right, there are tons of good-paying middle-class jobs available. That’s why people with college degrees are working for minimum wage. Because they like the atmosphere of the drive-thru window at Mickey D’s. Or because the blue Wal-Mart vest matches their eye color. Puhleeeeze.

      • kabuzz61 says:

        Desp, you have to expand your information sources. You can’t live on talking points. It shows your lack of depth.

      • CaptSternn says:

        Well, with the policies and legislation from the democrats, cutting oil and gas production on federal lands, things like Obamacare, people will be working less hours, have benefits cut, lose jobs and so on. One way to fix that, vote democrats out and elect tea party backed republicans. Thanks for pointing that out, Desperado.

      • desperado says:

        Stern, you take duplicitous to a whole new level. First you claim there are plenty of good-paying, middle class jobs–including in the oil field. Then you claim that there are none because of Democratic policies. Which is it?

      • bubbabobcat says:

        Des, des, des, you jes’ don’ unnerstan. It’s both. Situational ethics, situational facts, situational logic, situational reality,…

        As long as it’s alllllll warm and fuzzy inside.

      • CaptSternn says:

        There are a lot of good paying, middle class jobs to be had, even now. The Obama administration and democrats in general are doing all they can to work against the middle class and destroy those jobs. They have had some success.

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