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inflation

Education

$10.19 Big Mac? Fast food myth-busters explain why McDonald's is so expensive now.

Is cheap fast food over?

via Yum9Me/Flickr

A Big Mac value meal with a fudge sundae.

For nearly 70 years, McDonald’s has been the place for an affordable, quick, and predictable meal. However, since 2019, McDonald’s prices have risen drastically, and in many places, it now charges fast-casual prices for fast food, even though the quality is the same. What gives?

Over the past five years, the prices of McDonald’s most popular items have risen an average of 141%.

The Food Theorists, a YouTube page with over 5.4 million subscribers that debunks fast food myths and tells the stories behind your favorite food brands and mascots, explains the hefty price hikes in a 9-minute video.

The primary takeaway is that McDonald’s locations are all franchises, so the individual owners have the right to charge what they wish for a product. That’s why a McDonald’s in Darien, Connecticut, charged $17.59 for a Big Mac value meal. There was no nearby competition and consumers driving by on the interstate had fewer food options.

Food Theory: Why Did McDonald's Get SO Expensive?youtu.be

Conversely, in San Jose, California, one of the most expensive places to live and do business, a Big Mac is still relatively affordable ($5.79) because competition in the area keeps prices down.

Therefore, in an inflationary environment where prices are going up on everything, McDonald’s franchises can raise their prices to whatever consumers bear without facing any business consequences.

“If owners see one place is still thriving with higher prices, they'll increase theirs to get more money, especially when there's a need for what they're selling,” Food Theorists say in the video. “Basically, they can drive up prices to match competition because customers won't stop wanting McDonald's.”

The question is, when does the cycle stop? If businesses continue to one-up each other by raising prices with little consequences, at what point does all fast food become super expensive? When companies with lower prices begin to thrive, the expensive businesses, like McDonald's, are forced to return to Earth.

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inflation
Joy

Target lowers prices on thousands of items, including staples, in 'sign of disinflation'

Good news for people's grocery bills.

Photo by Shabaz Usmani on Unsplash

Target is dropping prices.

It's been a weird few years for theU.S. economy as the COVID-19 pandemic threw the entire system into disarray and recovery from it took some unpredicted turns, for better and for worse. One thing we knew would be coming was inflation, and Americans have felt it at the checkout counter. Price increases on basic food staples as well as restaurant prices across the board have been painful reminders that, despite record unemployment and a booming stock market, everyday life has gotten ridiculously expensive.

But there are some signs things may be taking a positive turn, such as Target's announcement that they will be cutting prices on thousands of items, including household essentials, in the coming months. Here's what shoppers can expect:

Target has already reduced prices on approximately 1,500 items and will continue through the summer to drop thousands more. "Consumers will enjoy savings on everyday items such as milk, meat, bread, soda, fresh fruit and vegetables, snacks, yogurt, peanut butter, coffee, diapers, paper towels, pet food and more. These price reductions will collectively save consumers millions of dollars this summer," the company shared in a press release.

More specifically, a pound of Good & Gather Unsalted Butter that was $3.99 will be $3.79, Good & Gather 5 oz. Organic Baby Spinach will drop from $3.29 to $2.99, and a 20-ounce package of Thomas' Plain Bagels is going from $4.19 to $3.79. Just in time for summer, Aveeno SPF 50 Sunscreen (3 fl oz) will drop from $13.89 to $13.19.

Savvy Target shoppers know how to get the most bang for their buck on a Target trip by using their Target Circle Card, which gives them an additional 5% off purchases, and the company recently reintroduced Target Circle, its free-to-join membership program that applies deals automatically at checkout and features member-exclusive sales throughout the year like Target Circle Week and Target Circle Bonuses—personalized deals to help members earn rewards and get extra savings.

LinkedIn editor Cate Chapman calls Target's price cuts a "sign of disinflation at work"—a hopeful sign, considering Target isn't the only store to announce price drops . Walmart predicted months ago that a "deflationary environment" would mean lower prices on dry groceries and consumables and they were already seeing lower prices on grocery items such as eggs, apples and deli snacks.

woman smiling in a grocery aisle

People's money should go a little further at the grocery store this summer.

Photo by Arren Mills on Unsplash

Even already-low-priced grocery chain Aldi has announced lower prices on 250 items for the summer of 2024. “We don’t want food prices to hold people back from getting together with friends and family or spending time outdoors this season," Dave Rinaldo, president at Aldi U.S., said in a statement.

And McDonald's, which has seen price increases over 100% over the past decade, announced recently that it is exploring a $5 meal option. It used to be that $5 could easily pay for a full McD's meal, but you can't even get a kids' Happy Meal for that price in 2024.

People have reacted to the news of lower grocery prices with a mix of relief and annoyance at feeling like they were being price gouged. They have a point. In fact, President Biden had taken aim at corporations in November of 2023, saying, “Any corporation that has not brought their prices back down, even as inflation has come down, even as the supply chains have been rebuilt, it’s time to stop the price gouging."

Whatever the reason for the lowered prices, feeling a little ease instead of squeeze at the checkout counter will be a refreshing change from the past few years.

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economy
Education

The amount of money Americans budgeted for food 100 years ago is mind-boggling

If we think our grocery bills are high now, it's nothing compared to what families spent in the early 1900s.

Photo by Karsten Winegeart on Unsplash

Even if we shop at the most expensive stores, we still don't spend as much of our income on food as they did in 1901.

As inflation following the COVID-19 pandemic peaked in the summer of 2022, Americans keenly felt it at the grocery check-out. It seemed as if prices had gone up on everything, and our food budgets took a hit. Even though inflation has eased since then, many of us are still lamenting the amount we're spending on groceries and dining out every month.

A New York Post headline ominously pronounced in February 2024 that "Americans have not spent this much of their incomes on food since the Gulf War," citing a federal statistic that U.S.consumers spent 11.3% of their disposable income on food—a higher percentage than we've seen in the past 30 years.

But as they say, it's all relative. While we balk at spending 11% of our income on food, families in the early 1900s would have been thrilled at spending that little on food.

According to the Bureau of Labor Statistics, Americans spent a whopping 42.5% of their household budgets on food in 1901, nearly four times what we spend now. In real numbers, that means the equivalent of a household with the current median income of almost $75,000/yr spending $2,610 a month on food. And that was the reality for a long time—even a few decades later in the 1930s, people were still spending more than a third of their income on food compared to our 11% today.

And the economy, while different in its nature, wasn't drastically different in terms of numbers at that time. The unemployment rate for Americans in 1901 was 4.0%, approximately the same as March of 2024. The country was between two mild recessions and it would only be two more years before it overtook Britain as the world's wealthiest nation. It's not like there was some huge economic downturn that had caused food prices to soar at that time. Food just cost a whole lot more relative to people's income back then.

Okay, so food budgets were high relative to income back then, but what about housing? Surely, people spent far less of their money on housing at that time, right?

Less, yes, but not by as much as we might assume. In 1901, housing made up 23.3% of the average household budget, while in 2022 it was 33%. Definitely an increase, but not as drastic as the decrease in our food budgets. (Caveat: Those percentages don't speak to everyone's individual situation—some Americans are spending upwards of 50% of their income on rent and utilities.) Our clothing expenditures have also gone down by a lot since 1901, from 14% of income to less than 3%.

So where is all of our money going to make our budgets feel squeezed? One spending category that's not even included in the 1901 statistics, which makes up double digit percentages of our spending today, is transportation. In 1901, the automobile industry was in its infancy, still a couple decades away from its first big boom that made cars commonplace. Now we have cars, buses, subways, air travel—and the fuel for all of those things—that people in 1901 simply didn't have to consider.

We also have technology like computers and smartphones now that have become more necessity than nice-to-have. And along with that, of course, we have copious entertainment extras that most of us can't imagine living without.

Another expenditure that doesn't show up in 1901 is healthcare, which takes up 8% of our budgets now. Did people simply not have healthcare expenses back then?

Basically, no, they didn't. According NPR, Americans spent around $5 a year ($100 in today's dollars) on medical care in 1900, primarily because there wasn't a whole lot of medical care to be had. We forget how far our advancements in medicine came in the 20th century, and that those advancements have a cost. Throw in the health insurance industry evolving in the middle of the 1900s, and now medical costs make up a decent chunk of our budgets.

It's fascinating to take a step back and look at the big picture of history when we find ourselves complaining about the price of a banana or a bag of rice. It's not that we can't or shouldn't feel frustrated when our cost of living increases, but when it comes to food budgets, we're living in pretty flush times, relatively speaking. Especially when we consider how much more access we have to different kinds of foods than ever before.

Fluctuations in retail prices have always occurred, of course, due to wars, recessions, etc., and some items have become more expensive while others have gotten cheaper, relatively speaking. But regardless of individual prices, if we find ourselves lamenting our curren grocery bill, it might help to remember how much more of the average budget food used to be. Even if grocery prices were to rise more, we still won't be anywhere near the percentage of our paychecks that food used to take up, and that's certainly something to be grateful for.

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finances
Democracy

Unemployed guy has some laughs explaining why finding a job is so frustrating these days

People can relate to the pain.

via Andrea Piacquadio/Pexels

A man cries out in rage while working on his laptop.

There’s a strange thing happening in the U.S. economy these days. Unemployment has been at its lowest in decades, and layoffs remain modest. However, people who are looking for work are having a hard time getting hired and it’s frustrating to send resume after resume and never hear anything back. What gives?

Business Insider says that despite a strong economy, employers are cautious about hiring more employees until they’re sure inflation is under control and that the Federal Reserve will eventually lower interest rates.

"It feels like the job market is in a bit of a holding pattern," Daniel Zhao, a lead economist at Glassdoor, recently told Business Insider.

YouTuber Levi Flemming had fun with the frustrations many people experience while job hunting these days in a new video called “The Typical Job Search Experience. Painful.” In the video, Levi has to go through the daunting task of filling out applications on countless websites and then when he finally gets an interview, he has to go through the gauntlet of middle management interviews, only to be rejected.

The typical job search experience. Painful.

Like many job seekers, Levi began his journey on LinkedIn. "We need to make a LinkedIn profile, by the way. It's like Facebook but more professional," he says in the video with nearly 2,000 views. Soon, he was off to the races and mindlessly filled out job applications on Indeed, Workday, Monster, Glassdoor—the list goes on and on.

Why does the auto-populate never work on these sites?

"Got to create my 800th Workday account and I need to upload my resume,” he continued. “Drag and drop successfully uploaded, and the auto-populate didn't do anything, so now we have to … manually enter the dates do you have at least 5 years of experience."

And there are all the strange questions:

Do you have experience with C++?

Have you ever been terminated from a job before?

Have you ever stolen from your employer?

Have you ever committed terrorist acts against the United States?

Finally, Levi lands an interview that quickly turns into what feels like a speaking tour of the entire company.

“Hey, look these guys are actually going to give me an interview. Go through the first interview with the hiring manager," Levi said. "Second interview with the boss's boss. Third interview with the senior boss. Have to do this take-home written assessment that takes me 4 days to do—got myself a fourth interview with the junior director. A fifth interview with the senior director and now we're waiting just waiting, waiting, waiting. Yey look, they finally emailed me back…”

And it’s a rejection letter—time to start all over again.

The video resonated with a lot of folks in the comments.

"Man! This is spot on. So much of my personal data floating around in company website job portals!" Jackbits6377 wrote. "Looking for work right now and the amount of tests I had to do for a f’ing customer support position was ridiculous. I just closed the application, lol," NowayConway added.

"Painful to watch, yet so damn true..." Pastilance wrote.


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