Thread by @ArmineYalnizyan

LOL
Businesses raise their prices *without* the minimum wage going up allathetime! #cdnecon

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Exhibit A: Tim Horton's raised the price of a cup of coffee in
2011 by 7¢ ("rising prices of coffee beans")
2014 by 10¢ ("rising operations costs", with coffee bean prices and, oh yah, costs of [$11B] Burger King deal identified)
August 2017 by 10¢ ("rising operations costs")

You will note not one of those rising costs were wages.
NONE.
Put price rises in context. Any rising input cost is a rising cost. Period.
Including executive pay and mergers and acquisitions.

Very excellent comment made" rising operations costs" include wages.
So.....some follow up with the Timmy's case, which in some ways is exemplar for what is going on.
This may take a few tweets, so mute me if you're not interested.

1. "Rising operations costs" include wages. True in theory.
In practice: a cup of Tim Horton's coffee increased by 7¢ in Aug 2011, but there was no change (ZERO increase) in the prov minimum wage between Mar 31/2010 - Jun 1/2014
So that's not why the price went up in 2011.

1a. (Ontario's provincial minimum wage went to $10.25 in March 31, 2010, and didn't go up again til June 1, 2014 when it rose to $11.00) #cdnecon #canlab #onpoli

2. In Aug 2014, the price of coffee went up by 10 cents a cup (2 months after the minimum wage went up to $11).
But labour costs were not mentioned as the reason for the increase.
Instead, the company specified two other costs of operations: ..../2a

The reasons given for the price rise in coffee were two fold: the rising cost of coffee beans and meat; and the fact that they had booked $27.3 million in costs related to the Burger King deal. ctvnews.ca/business/tim-h…

3. The statutory minimum wage was increased in October 1, 2015 from $11.00 to $11.25
October 1, 2016 it went up to $11.40
October 1, 2017 it went up to $11.60
(just pause on that a second, the 20/25 cent increases)
Tim Horton's raised the price of coffee again in 2017, but....

4. The next Timmy's hike was in August of 2017, (before the October 2017 minimum wage increase), when the price of coffee went up again by 10 cents.
Every story at the time reported unspecified "operating costs". ..../4a

4a. Only the franchisees asked to raise the costs of coffee even higher to deal with rising wages (in the fall).
Their requests were ignored by the mothership (corporate HQ). They raise the price when they need the cash for buying other things.
This is important to understand.

5. The mothership of Tim Horton's is 3G.
It's an asset-stripping, risk-shifting, rent-extracting global business model. Bloomberg described it in a stunning cover story years in 2014:
bloomberg.com/news/articles/…

6. Bloomberg wrote this about 3G and Tim Hortons in 2014 business.financialpost.com/news/retail-ma… (while it's a Bloomberg story, I can't get the full story at Bloomberg, interestingly)

And this in 2017, having moved on from being the king of fast food chains. bloomberg.com/gadfly/article…

7. "Rising operational costs" is code for raising money from companies they own to acquire to acquire other companies. That is not unique to 3G.
Corporate concentration is the name of the game in the era of slowth.

8. @Oxfam produced this remarkable chart in 2012, thousands of products -- perhaps the majority of what we buy in supermarkets -- are owned by 10 companies
Check out the Behind the Brands campaign oxfam.org/sites/www.oxfa…

9. So do prices rise because workers get too much/the minimum wage is too high?
Well, when wages rise, input costs rise. But so too do cost rise when the price rises for electricity, petrol, avocados, steel, EXECUTIVE PAY. Or cash is needed to buy market share/eat competitors.

10. It's very easy to blame minimum wages/pensions/benefits/workers for business problems. There's lots of moving parts. Keep your eye on the whole game.

~FIN
#cdnecon #canlab #canpoli #FutureOfWork