If you marched for a bigger paycheck, don’t be surprised when your grocery bill follows, Dave Ramsey said on a March episode of “The Ramsey Show,” where he said wage demands are directly tied to rising prices.
“You don’t get to bitch about paying more for stuff because you caused it,” Ramsey said, pointing to the labor disruptions and wage hikes that followed the COVID-19 shutdowns.
“When you’re walking around with a little picket in your hand and you’re saying ‘I demand $15, I demand $22, where I was making 10 to work at McDonald’s, then the cost of McDonald’s goes up.”
Wages Up, Prices Up
The topic came up when a caller from Idaho, Jared, asked how he could continue offering low-cost services while giving cost-of-living raises to his employees.
Ramsey didn’t sugarcoat it: “Your job is not the macro economy. Your job is to run your business and take care of your family and the families that you pay.”
He explained that when wages go up, prices have to follow. If not, businesses can’t survive. “Anytime you pay people more inside your business, you have to absorb that in price changes,” Ramsey said. “Otherwise, you’re not profitable.”
Ramsey gave a concrete example from his own company: “The cost of paper has gone up 30% in the last 24 months… So the next book you buy from us, get ready, the price is going to be more.”
Labor Market Fallout From COVID
Ramsey pointed to what he called the long tail of the pandemic’s economic effects. “When America got Fauci’d,” he said, many service workers were told they weren’t essential and were sent home. Now, those same workers aren’t rushing back.
“You want to hire somebody in the service world today? Pre-COVID you might have done that for $10. Now you might be looking at $25,” he said.
That labor shortage pushed employers to offer higher wages, which in turn pushed up the cost of everything else. “So you can’t go ‘I don’t like the fact that fast food prices all went up, and yet you’re walking around demanding that the cost of labor at a fast food place go almost freaking double.”
Nonprofits Aren’t Immune Either
Ramsey also stressed that even nonprofits must operate with a profit margin. “A nonprofit that isn’t profitable is out of business. It’s gone,” he said.
Whether it’s a business or a church, if labor or utility costs go up, expenses rise, and someone has to pay for that.
Co-host Jade Warshaw chimed in, adding that businesses aren’t greedy for adjusting to these economic pressures. “You don’t have to feel guilty about it. It’s just part of it,” she said.
Economic Literacy Is Lacking
Ramsey said the problem is partly due to a lack of basic education in economics and civics. “It’s interesting how ignorant some of this wealth equality stuff is,” he said.
“I demand to be paid more, but then on the other hand, I’m going to bitch about inflation? When you freaking caused it. You’re the essence of it.”
As for those $10 sales on his books? Ramsey says they’re probably over. “That was helpful for a while, but… cost of paper kicked my butt, and so I’m gonna pass on the butt-kicking. That’s how this works.”
IMAGE CREDIT: ”Dave Ramsey” by Gage Skidmore, via Flickr. Licensed under CC BY-SA 2.0. Image adjusted for layout.