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Salon has an interesting piece about a decision recently made by upscale hamburger chain Shake Shack - to raise prices. The reason was simple - the company wanted to increase wages and benefits for its employees.

Adam Seth Litwin, associate professor of industrial and labor relations at Cornell’s ILR School, puts it this way: "Shake Shack is betting that its customers - willing to pay a premium for quality - would be willing to pay a premium for good employment practices, too.”

Here's how Salon frames the story:

"If the price of a product or service goes up slightly in order so as to fairly compensate the workers who make it, are customers OK with paying extra? This is a question that Shake Shack is asking this year as it raises the prices of its burgers and chicken sandwiches so as to offset the rising share of its operating costs attributable to labor and related expenses, including health insurance.

"Price increases on some menu items went into effect this month after restaurateur Danny Meyer’s 12-year-old burger chain, which sprouted from a Manhattan park kiosk into a $1.2 billion global venture, raised wages across the board for its employees last year ... The hikes vary by region under a new tiered policy designed to help the company adjust for local wage standards and other business expenses."

The story goes on: "Like Starbucks and Chipotle, Shake Shack falls within a group of companies that have been considered as having a progressive corporate identity. Still, when the nationwide average for food and beverage servers is just $9.16 an hour, offering above-average wages and basic benefits like matching 401(k) and health insurance payments could be viewed less as an act of magnanimity and more as a bare-minimum gesture."
KC's View:
Pay employees like they are an asset to the business, and they'll actually be an asset to the business. I know that this might mean different things to different people in different places, but I think it is a pretty good rule of thumb.