McFlation

Real Inflation is right there for the country to see on McDonald's Price Menus.

Zero Hedge recently published a succinct and telling story on real inflation.

All the authors did was show price inflation (or menu inflation) at McDonald’s in the past 10 years.

As this excellent graphic shows, every food item on the McDonald’s menu went up at least 50 percent with the average price increase of 10 popular menu items being 100 percent.

Someone figured out that McDonald’s prices are archived.

The price of the McChicken sandwich increased the most - from $1.00 in 2014 to $2.99 in 2024 - a price increase of 199 percent.

Per this story and graphics, anyone can see that real inflation at McDonald’s was spectacularly higher than official CPI inflation - which averaged between 2 and 3 percent per year in the same 10-year time span.

If McFlation was the same as CPI inflation, menu items would have gone up 20 to 30 percent, which means the McChicken sandwich would be about $1.30 today.

From this one short story, one can quickly make a few salient points.

Presumably, McDonald’s - which caters to the working or middle class (and poor) customers - does everything it can to keep its prices affordable. However, even with every executive in the company trying to achieve this goal, the company’s prices still doubled in a decade for most menu items.

Scary Thought No. 1: The inflation we see on the McDonald’s menus is the inflation we get when every executive is trying to keep the price increases as low as possible.

Also, McDonald’s is using as many inflation work-arounds as their customers.

The company has already cut labor expenses as much as it can via automation and kiosks. (One imagines that far fewer fast food workers are required to serve customers our filet-a-fishes and large fries than 10 or 40 years ago.)

Per my conclusions, the top corporate workarounds are …

… Automation, followed closely by using as much cheap, illegal-immigrant labor as possible, followed closely by fighting to keep the federal minus wage as low as possible (it hasn’t been increased in 15 years), followed by ever-increasing shrinkflation and substitution.

One would have to find a food tape measure, but I suspect the McDonald’s chicken nuggets are smaller than they used to be and so is the bread and patty on a basic hamburger.

“Substitution” is when companies substitute cheaper ingredients or parts to keep price increases lower than they’d otherwise be. I can’t tell a difference in the taste of McDonald’s meals, but I can with many grocery store and restaurant food items - which suggests “substitution” is rampant.

Scary Thought No. 2: One wonders how much a quarter-pounder with cheese would cost if each McDonald’s restaurant employed the same number of employees as it did in, say, 1975 or 2005?

The government sales tax racket …

Actually, the above prices don’t give us the real prices of McDonald’s menu items because they don’t include sales tax. As it turns out, when prices go up, the sales tax goes up too.

This means the state, local and federal governments that collect sales taxes are making a killing from inflation.

In Troy, Alabama, groceries and restaurants are subject to a local sales tax of 10 percent.

This means the government used to pocket 30 cents back when a Big Mac cost $3. Today, the same governments share 60 cents every time McDonald’s sells a Big Mac.

If a typical family of four pays McDonald’s $35 for a couple of “Value Menu” combo meals, that family actually has to spend $38.50 - with the government making $3.50. (And the government doesn’t have to buy buckets of special sauce, pay the utility bill or train the employees).

Grocery store Buggy Inflation is another excellent alternative metric of real inflation …

Ten years ago I’m pretty sure our family of four could fill up a grocery store buggy for $150. Today, it cost at least $300 to fill up the same buggy with the same items (and all of the packages have experienced massive shrinkflation).

The government used to make $15 every time Bill or Carrie Rice went to the Piggly Wiggly. Now our friends in government make $30 … and they don’t have to stock the shelves.

Scary Thought No. 3: Politicians tell us they also hate inflation and are doing everything they can to fight it … but that inflation is actually paying the salaries and benefits of their employees, who unlike many McDonald’s employees, have not been replaced by machines.

The scary thought is the people in charge of fighting inflation … really like rising prices and will need even higher prices in the future to pay the indispensable “public services” government workers provide.

Wages don’t come close to matching real inflation …

It’s been argued that rising prices don’t affect many families … as long as wages and salaries at least match the real inflation rates.

This means a worker is good to go if his own income doubled in the past 10 years … But most American’s weren’t “good to go.”

According to official statistics, the average income of an American citizen in 2024 is $59,436. In 2014, “the average American salary” was $44,569.

Average salaries increased by 33.35 percent in 10 years while prices for most items on McDonald’s menu increased by 100 percent.

Income didn’t come close to matching Big Mac Inflation.

Another little white lie is that people actually don’t make their average salary because government, on average, takes 25 percent for taxes and FICA. While the “average income” in 2024 is $59,436, the average “take-home” pay that people use to buy fast food and groceries is $44,577.

Many fast-food employees start out making the federal minimum wage, which has been $7.25/hour since 2009. But after the government gets its bite, these workers actually take home only about $5.44/hour.

This means a McDonald’s employee who was pocketing $5.44/hour in 2024 would need to work 2.2 hours to make enough money to pay for a Quarter Pounder with Cheese Meal at the restaurant where he or she worked (Today’s price: $11.99).

In 2014, the same worker could buy the same meal after one hour of work. That employee was still making, net, $5.44/hour, but the Quarter Pounder Meal was only $5.33.

Another way to express this is that a minimum wage worker had to work more than twice as many hours in 2024 to pay for the same meal.

Deeper thoughts on government’s lying statistics …

I’ve done a great deal of research into price inflation and written a fair number of stories on this topic. (In fact, my first “paid” freelance article - published by The American Conservative - was on the topic of “shrinkflation.”)

One point I’ve repeatedly made is that real inflation is much higher than official inflation, which is calculated by myriad dubious means designed to keep the official inflation figure as low as possible.

In my opinion, this manipulation of data is done to promote the narrative that the macro economy is in much better shape than it really is.

While performing my inflation research, I kept discovering articles and official economics papers which stated that inflation is actually low or, in the minds of Fed governors for many years, was even too low.

This claim became part of the accepted inflation/economy narrative … a result that made me feel I was living on another planet.

I started to wonder if I was the only American who was eating at McDonald’s. Couldn’t other Americans tell prices were going up a lot more than 2 percent per year?

What the government - and their stenographers in the MSM - are really telling us is that we should believe them … and not our own eyes … or the giant menus in the drive-through lane.

The fact so many important people go along with the bogus Inflation storylines gnaws at my psyche. People (like members of the pack “watchdog” press) who should question dubious narratives … don’t do this.

The inflation lies foretold the Covid lies …

When Covid happened, I transitioned into looking at official data and statistics that allegedly quantified the pandemic of the century.

Per my quick quick conclusion, all of this data was also highly suspect - numbers that were also accepted as the gospel truth by the same “truth-seeking” reporters.

Every piece of data that comes from any government agency must be just as preposterous, I concluded. Not only was the Covid data heavily manipulated, whenever needed, the real data was concealed from the public.

For me, it’s a given the government lies with almost all of its significant statistics and data. But our leaders apparently know they can get away with these lies, just like they did with the narrative that inflation was “low and contained.”

When not enough people call the government on its serial lies, the government learns they can lie with impunity.

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