Pre-Minimum Wage

Increase Grocery Prices

Fall, 2016

 

 

By:  David Deschesne

Editor/Publisher, Fort Fairfield Journal

November 23, 2016

 

 

   With the advent of a massive new minimum wage increase on the horizon, approved by Maine voters to increase to $12.00 per hour in 3 years from the current $7.50 per hour, I have decided to take a snapshot of grocery prices in order to provide a benchmark of where prices were today before the wage increase takes effect.

   I have surveyed common food items that most people would purchase in this area on a continual basis to feed themselves and their families.  I visited the primary grocery stores in Fort Fairfield, Presque Isle, Limestone, Caribou and Washburn (five total, no Wal-Mart pricing) to compile these average prices.  Since manufacturers from time to time decrease the size of their product in order to hide price increases (remember when sugar came in 5 pound bags, but now is 4 pound?  How about a 16 ounce coffee can that is now down to 10.3 ounces?) I have attempted to note the weight of the unit when applicable or possible and have adjusted all similar items to the same unit of measure in the event some stores stock different sizes.

   This is an unscientific survey since any changes in the products’ pricing will be affected not only by the wage costs, but also by the valuation of the U.S. dollar, taxes and certain market conditions for the various foodstuffs.  So, think of this as simply a picture of food prices today.  The goal here is to revisit these food prices after Maine’s minimum wage reaches $12.00 per hour in three years’ time in order to see how much pricing of our food has risen at the retail level.  Whenever possible, prices for grocery items are derived from the lower-priced generic, “store-brand” items, not national brands.

 

Meat

Rib-eye, per lb..................... $9.39

Hamburger 80% lean per lb.... 4.04

Chicken Thighs per lb............ 1.75

Pork chops, bone in, per lb..... 1.87

Bacon, thin sliced, per lb........ 3.79

Hot dogs, red, Jordon's, per lb 5.74

Hot dogs, beef, Ballpark, per lb.. 4.57

 

Fruits/Vegetables

Russets, single, per lb......... $0.79

Rice, white, per pound........... 1.21

Lettuce, iceberg, per head...... 1.73

Tomato, Hothouse, per lb....... 2.29

Apple, Cortland or Mac, 3lb bag 3.33

Green beans, 14.5oz can....... 0.68

Corn, 15.25 oz can................ 0.60

Peas, 15 oz can.................... 0.62

Coffee, 10.3 oz can, Folgers.. 4.08

Apple juice, frozen concentrate 1.49

Grape Juice frozen concentrate 2.34

Maple Syrup, 24 oz................ 2.59

Peanut Butter, 16.3 oz jar....... 2.25

Grape Jelly, 18 oz jar............. 1.81

 

Bread, Grains, Cereals, Sugar

White Bread, 20 oz loaf........ $1.45

Split Wheat Bread, 20 oz loaf. 2.00

Whole Wheat, Nature’s Own, 20oz          2.99

Hot dog rolls, 8 ct.................. 1.31

Hamburger rolls, 8 ct............. 1.33

Spaghetti, thin, 1lb box.......... 1.05

Macaroni, 1lb box.................. 1.05

Brownie mix, 19.8oz box........ 1.63

Pancake mix, 32 oz box......... 2.33

Corn flakes, 18 oz box........... 2.40

Crispy rice, 12 oz box............ 1.99

White sugar, 4 lb bag............. 2.25

Brown sugar, 2 lb bag, light.... 1.79

 

Dairy, Eggs

Milk, 2%, gallon................... $3.80

Butter, 1 lb, salted................. 3.25

Cheddar cheese, 8 oz block... 2.13

Processed cheese slices, 12 oz  2.45

Vanilla ice cream, 1/2 gal....... 2.71

Eggs, large white, dozen........ 1.03

 

  Currently, minimum wage is at $7.50 per hour.  Now, let’s presume the person earning that wage is not still in high school and living at home with their parents, who are buying the groceries for them while they spend their excess money on movies, cell phone minutes and video games.  A person earning $7.50 per hour is going to net $300 per week and after taxes will likely take home around $250.

   Now for an exercise in futility.  Let’s create a hypothetical four family household where both parents are working for the current minimum wage and are not relying on any food stamps or welfare benefits.  This gives them a combined $500 per week for their expenses.  I will now compile a sample shopping list for the products they might buy each week to illustrate how much of their weekly income would be consumed just with food.

 

Meat:

Rib-eye, 4 lbs.................... $37.56

Hamburger, 4 lbs................. 16.16

Chicken, 4 lbs....................... 7.00

Pork chops, 4 lbs.................. 7.48

Bacon, 2 lbs.......................... 7.58

Red hot dogs 4 lbs............... 22.96

 

Fruits/Vegetables

Russets, 4 lbs....................... 3.16

Rice, 1 lb.............................. 1.21

Lettuce, 1 head..................... 1.73

Tomato, 1 lb.......................... 2.29

Apples, 3 lb bag.................... 3.33

Green beans, 2 cans.............. 1.36

Corn, 2 cans......................... 1.20

Peas, 2 cans......................... 0.62

Coffee, 1 can........................ 4.08

Apple juice, 2 cans................ 2.98

Grape juice, 2 cans................ 4.68

Maple Syrup, 1 bottle............. 2.59

Peanut butter, 1 jar................ 2.25

Grape jelly, 1 jar.................... 1.81

 

Bread, Grains Cereal, Sugar

Split wheat bread, 3 loaves.... 6.00

Hot dog rolls, 2 packs............ 2.62

Hamburger rolls, 2 packs....... 2.66

Spaghetti, 2 lbs..................... 2.10

Macaroni, 2 lbs...................... 2.10

Brownie mix, 3 boxes............ 4.89

Pancake mix, 1 box............... 2.33

Corn flakes, 1 box................. 2.40

Crispy rice cereal, 1 box........ 1.99

White sugar, 1 bag................. 2.25

 

Dairy, Eggs

Milk, 4 gallons..................... 15.20

Butter, 4 lbs........................ 13.00

Cheddar cheese, 2 blocks...... 4.26

Cheese slices, 2 packs.......... 2.45

Ice cream, 3 cartons.............. 8.13

Eggs, 2 doz.......................... 2.06

 

Total weekly groceries:..... $206.47

 

  As you can see, it takes just about an entire week’s take-home pay of one of the parents making the current minimum wage to buy groceries for two adults and two children.  The other parent’s paycheck would then be used up on rent, phone, electricity gasoline, fuel oil and—if any money is left over—luxuries like cable/satellite TV and internet.

   For those who don’t buy their own groceries out of pocket, such as students living at home and those who receive State assistance, this is what you could expect to pay to feed four people if you had to work and earn the money to do so, today.

   The thinking among the advocates of the minimum wage increase was that wages would be increased so there would be more disposable income after purchasing the necessities such as the food just listed.

   However, what those advocates didn’t take into account was that grocery stores, convenience stores and restaurants (the latter two aren’t included in this pricing snapshot) employ  mostly minimum wage earners as their labor pool and aren’t providing that service as a hobby.  Businesses have to make money to pay their own bills and provide the owner a reasonable return on his/her investment of time and resources.  Otherwise, there would be no grocery stores and we’d all be stuck in a field all day trying to grow enough food to feed ourselves, like our forbearers used to do.

   As retail prices of food rises, those receiving additional money from the artificial minimum wage hike will find the extra money they will be earning—if they still have a job— is going to be absorbed by higher costs of food and services, so at the end of the day they will not be any further ahead. 

   After the socialists who advocated for the minimum wage increase realize this problem, my greatest fear is that they will put another referendum question on the ballot to allow for government price controls of food.  That would be a nightmare.  As history has shown, from the former Soviet Union all the way through to modern day Venezuela (which is currently suffering under  food shortages and an economic collapse), any time a government gets involved with dictating prices for food, making them  lower than what it costs to produce, food tends to cease being produced and distributed and grocery store shelves end up empty with people being rationed only a portion of the food they actually need each week to survive—and that’s if the government can even find any food to provide for them.

   Venezuela is currently suffering under that failed model where the government mandates prices for all food be at a level everyone can afford. But, since the retail price is much lower than it actually costs to produce the food, no food is being produced or provided to them and the citizenry there are suffering greatly.  This past summer, they ran out of pigeons, dogs, cats and zoo animals to eat.  Their store shelves are still empty and starvation diets are the norm in that government price-controlled socialist country.

   Unfortunately, prosperity has bred ignorance in this country, and especially in this State of Maine where our founders were rugged individualists who could provide for all of their own needs without the use of grocery stores and big box department stores.  So, in three years when those earning $12.00 per hour still can’t pay their bills because prices have risen (to offset the wage increase and compensate for the further devalued U.S. Dollar), the next ballot question for the citizens will likely be government price controls on food.

  Before that happens, you better start a big garden and get really good at growing food.  Surrounding your garden with a chain-link, barbed-wire fence might not be a bad idea, either.  Because when the next socialist-inspired referendum question is passed by the undereducated  masses to give us government price controls, the failure of that system will finally spill over into your own back yard as the socialists’ “equal distribution of misery” ideal washes over the entire state.

   Until we start teaching real economics to our children, they will grow up and continue to destroy our economy using the popular vote.