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Shake Shack Hikes Burger Prices to Increase Worker Wages

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A moderate price bump will allow the company to better compensate staff across the U.S.

Burger, fries, and a drink at Shake Shack. Photo Illustration by Scott Olson/Getty Images

As fast food labor practices continue to spark nationwide protests and prompt lawmakers to raise the minimum wage, Danny Meyer’s billion-dollar burger chain continues to stake its reputation on consumers who don’t mind spending an extra dollar or two for critic-approved fare and fairly paid workers. Case in point: Shake Shack, famous for its long lines and griddled burgers, hiked some of its menu prices by up to 36 cents last month so it could better compensate its staffers.

The publicly traded company has a longstanding policy of paying workers more fairly than what the law requires. Accordingly, as cities and states across the country prepared to hike their minimums to $10, $11, and beyond — Seattle reached $15 for certain large employers this week — Shake Shack raised its own wages even further.

Shake Shack, incidentally, does not have any Seattle locations.

Team members in New York City now have a starting hourly rate of $12.50, 50 cents more than the state’s prevailing fast food wage of $12 — which translates to about an extra $1,000 over the course of a standard work year.

With these salary increases came an uptick in Shack prices of about 1.8 percent, which the chain first announced during its last conference call in November. Some items, like the fries and the classic frozen custard shakes, have not gone up in price at all.

But the classic ShackBurger is up a dime to $5.39 in Long Island, New Jersey, and elsewhere, or 26 cents to $5.55 in New York City, Miami, Los Angeles, Las Vegas, and other larger cities. That makes the chain’s signature offering barely more expensive than a McDonald’s Quarter Pounder with Cheese (currently $5.39 in Midtown), but cheaper than a Five Guy’s Burger ($8.29 in Times Square).

This is the first time an everyday ShackBurger will cost more than $6 after tax. Add on fries, which are still $2.99, and a soda, up a nickel to $2.35, and you’ll be out nearly $12 in Manhattan or Brooklyn. Replace the soda with a custard shake and you’ll pay $15.

The Chick’n Shack rose by 26 cents as well, to $6.55 in New York, which is about a buck pricier than a Chick-fil-A sandwich, but well over a dollar less than David Chang’s spicy Fuku chicken sandwich. The Shack Stack, the nearly 800-calorie sandwich that includes a beef patty, special sauce, and a fried portobello mushroom stuffed with cheese, is up by as much as 36 cents to $9.95.

“The moderate price increases reflect our continued commitment to lead with hospitality, pay above minimum wage, and provide our team with real career growth opportunities,” wrote Laura Enoch, a spokesperson for the company, in an email to Eater. The raises, which came in 2016, were across the board, from entry-level hourly workers to salaried managers and general managers. That hourly rate in New York tops out at $21 for certified shift managers — nearly $44,000 if employed full time.

The average wage of a fast food worker nationwide is less than $9.50 per hour.

Shake Shack also raised some manager salaries to above the proposed federal overtime limit of $47,476, a threshold that was blocked by a Texas judge last November. “Despite the injunction, we made the conscious decision to raise pay across the board to exceed the threshold for some of our managers,” Adam Shapiro, another Shake Shack spokesperson, wrote in an email, adding that managers already earning above that level were given raises as well, to avoid so-called wage compression.

Employees at Shake Shack, like their counterparts at Starbucks and Chipotle, which are also known for their progressive labor policies, are eligible for health insurance and match 401K plans, among other benefits.

Previously, the cost of any particular item at Shake Shack was largely uniform outside of stadiums and ballparks, but Shake Shack has brought back tiered pricing, which allows the chain to better adapt to different consumers (as well as different labor and real estate costs) in different markets.

This is the fourth time Shake Shack has raised prices over the past two-and-a-half years; the ShackBurger was $4.75 in mid-2014. The ShackBurger started at $3.95 in 2004 when there was just a single Shack, at New York’s Madison Square Park. Adjusted for overall inflation, that burger would cost $5.05 in 2017 dollars.

Shake Shack Hikes Prices to Stay Ahead of Rising Minimum Wages [E]
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