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The price of your burrito isn’t going down. Here’s why.
Sep 7, 2022
Episode 747

The price of your burrito isn’t going down. Here’s why.

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Plus, we're still taking your questions on student debt relief.

Let’s face it, it’s getting more expensive to eat out these days. One of our listeners noticed the price of his burrito went up by $2 and wonders if it’ll go back down now that inflation is a slowing a bit. Probably not. We’ll explain. Plus, we take your questions about student loan debt relief, electric vehicles and the military, and one of our listeners makes us smart about cherries!

Here’s everything we talked about today:

We can’t make this show without you! Keep submitting your questions at makemesmart@marketplace.org or leave a voice message at 508-U-B-SMART. 

Make Me Smart September 7, 2022 transcript

 

Note: Marketplace podcasts are meant to be heard, with emphasis, tone and audio elements a transcript can’t capture. Transcripts are generated using a combination of automated software and human transcribers, and may contain errors. Please check the corresponding audio before quoting it.

 

Kimberly Adams: All righty then.

 

Kai Ryssdal: All right, Drew, if you’re ready, we’re ready. Oh, I’ll take that for a yes.

 

Kimberly Adams: He was ready. Welcome back to Make Me Smart, where we make today make sense. I’m Kimberly Adams.

 

Kai Ryssdal: I’m Kai Ryssdal. Thank you for being with us for “Whaddya Wanna Know Wednesday”, the day in the week where we answer all y’all’s questions.

 

Kimberly Adams: If you’ve got a question about the economy, business, or technology, you can email us at makemesmart@marketplace.org. You can leave us a voicemail at 508-U-B-SMART, or many other ways. We look at Twitter, we look at Discord. I mean, if you see us on the street, maybe? No, actually. Anywho, our first question for the day comes from Scott in Ventura, California.

 

Scott: Hey, Make Me Smart team. Quick question on this inflation peak that people are discussing. I think people are used to prices like gas and rent and commodities going up and down. And we’re seeing some of that relief now as those prices drop. But what about all the services and other prices that have gone up in the past six months? Like coffee shops or food? I guess I’m asking, the $6 burrito that I now pay $8 for, is it ever going back to six, maybe seven? Thanks for making us smart.

 

Kai Ryssdal: Scott Scott Scott. Scott Scott Scott. Do you want to do this one? Or do you want me to do this one?

 

Kimberly Adams: You go ahead.

 

Kai Ryssdal: Okay. So, Scott, the short answer is no. And here’s why. So I’m sure you remember in this whole inflation run up thing as it got going, Fed Chair Jay Powell was all about transitory, right? He said, we believe these are going to be transitory, price increases and it’s going to take care of itself over time. And then one day, as it was proving not to be transitory, David Gura, who now works at another public radio out there, but used to work here at Marketplace, asked Powell after one of his meetings with the other members of the Federal Open Market Committee. David said, Could you define transitory for us? And I thought that was a great question, because we’ve all been sort of assuming we knew what transitory meant, which was prices are gonna go up and they’re gonna come down. Uh huh. But no, that’s not what Powell meant. Powell said, look, prices are gonna go up, and a lot of them are gonna stay up, they’re not gonna go back to where they were. And a lot of prices right now, not the volatile stuff like commodities and energy and gas and all that stuff. Not the volatile ones, but the regular ones are sticky. Rent is sticky, food is sticky, there are prices that are going to go up – have gone up, and will, if they go down at all, go down only a very little bit. So the short answer to your question is no, you’re probably not going to get your $6 burrito back. You might get a $7.50 burrito? I don’t know. But it’s unlikely. Next print on the consumer price index, by the way, is the 13th. Next Tuesday, so keep your eyes out for that.

 

Kimberly Adams: Yeah, I think just a key point to add on top of everything you just said is that, a big part of these price increases is wages, and people’s wages going up, because we’ve had shortages in many industries, and people have been demanding more money. And unless you want to go back to all those folks and say, oh, wait, you know, we want to ease inflation, we’re going to decrease your salary, those prices aren’t going anywhere.

 

Kai Ryssdal: Right. Exactly. Okay, so student loan relief, still a very big topic, still lots of questions. Of which we have one.

 

Louisa: Hi, this is Louisa calling from Illinois. And I’m calling to ask you to make me smart about student loans forgiveness. Since 1980, statistically more women have gone to college than men. And like since 2020, about 80% of all single families have been led by women. So just curious as to how student loan forgiveness will help women? And if it’s going to help more women than men? And if it’s going to help single family households in this economy? Thank you.

 

Kimberly Adams: Love all the stats, Louisa. Good job. So the short answer is yes. Biden’s student loan relief is expected to have a bigger impact on women than men, pretty much for the reasons that you say. But on top of the fact that more women than men have been getting college degrees, women hold two thirds of the country’s student loan debt, not just because more of us are going to college, but also because of the gender pay gap. So once women graduate, they have that same debt that maybe a man might have when graduating, but you’re gonna make less. And if you’re a woman of color or a person of color in general, you’re probably also going to be making less than the average. And so all of that makes it then harder to pay back that debt in the same way, so women end up carrying more of that debt overall. That’s from the American Association of University Women, that information as well. One pull quote that Marissa highlighted: “Women with bachelor’s degrees who work full time make on average 26% less than their male peers, hampering women’s ability to quickly pay off debt.” So then on to Louisa’s second point about single family households. In order to qualify for the student loan forgiveness, if you are a head of household, you have to earn less than $250,000 a year, and there are a bunch of other rules the Department of Education has. So if you’re under that cap, you probably want to check with your loan servicer to make sure that you meet the requirements and to see what kind of aid you can get. But you know, if you’re eligible, if you’re like a single mom, you know, who’s not making that much money, but you’ve got some college debt, you know, you’re probably going to get some sort of relief. And there was a story about a woman who, a single mother who paid off her loans during the pandemic, but now she’s actually going to get a refund under this program. And the number that we have here, 1.7 million women in college are indeed single mothers. So really good question, Louisa.

 

Kai Ryssdal: Yeah, great question. Seriously. And important topic, too. And how all those…

 

Kimberly Adams: For sure. All right. On to the next question from Dale in North Carolina. He says, there’s lots of talk about all us civilians switching over to electric vehicles, EVs. But what about the military? How much of the transportation fossil fuel consumed by the US is civilian versus military? And I shall defer to our resident military experts.

 

Kai Ryssdal: So the short answer, Dale, is boatloads, tonnes, many, many metric tons. Here’s the data. Marissa got this for us. Studies at Brown University is the root source for all these figures. Here’s the quote, if the US military were a country, its fuel usage alone would make it the 47th largest emitter of greenhouse gases in the world, sitting between Peru and Portugal since 2001. The military, the Pentagon, was responsible for emitting 1.2 billion metric tons of greenhouse gases, that is equivalent to, and this is the last number, annual emissions of 257 million passenger cars, which is twice the number of cars currently on the road. So look, yes. And when you think of all the activities the military does, from flying to ship propulsion to jeeps and tanks and buses and all of that stuff. It is a lot. Here’s a little side note that I was not aware of until this podcast came into my life, greenhouse gas emissions is really tricky when you’re thinking about the military because of data consistency from the Pentagon. Look, the Pentagon can’t even literally balance its own checkbook. They failed every audit they’ve had since like, I don’t know, James Forrestal been Secretary of Defense, but they don’t provide consistent data. And also, at one point, the US government petition to exempt the Pentagon and its climate emissions from the Kyoto Protocol, which is a former greenhouse gas and climate change treaty. So really tricky to do. The Pentagon is working on transitioning its ground vehicles to electric or hybrid electric, working with GM to make that happen. Army’s working on climate strategy. So the short answer is, the Pentagon has a huge challenge for climate change, which is really ironic because leaders in the Pentagon will tell you, that climate change is a national security issue, which it is. From base flooding to competition for water, to heat and refugees and climate migrants, all of it is a huge national security issue, of which the Pentagon is apart. So there you go.

 

Kimberly Adams: And there are also a lot of other government vehicles outside of the military. There was that whole thing about the post – the US Postal Service needing all these new vehicles and they wanted to make them EVs and somehow that did not happen. It’s a whole other thing.

 

Kai Ryssdal: Kind of a mess. All right. Here’s another one.

 

John 

This is John from Fayetteville, Arkansas. And I was wondering, what’s the comparison of productivity between the US and a country like France? I was in France 20 years ago, and there, at that time, and I’m sure it’s still the same, workers had so many hours to work. And when they worked all those hours, they didn’t work. Deadlines didn’t matter. I’m curious to see if there’s a difference in productivity between France and the US. Thanks.

 

Kimberly Adams: So I think we have a little bit of, you know, sort of the cultural narratives about workstyles at play there, because I’ve definitely heard that, but it’s not exactly true. So short answer to your question is that yes, US productivity is a little bit higher than France, according to the latest numbers from the OECD, the Organization of Economic –

 

Kai Ryssdal: Organisation for Economic Cooperation and Development.

 

Kimberly Adams: Thank you. So yes, France has the 35-hour work week, very famously. But it’s not just that people can only work 35 hours and that’s it. 35 hours is just when the overtime and paid time off kicks in. So here in the US and most workplaces, you know, you get your 40-hour week, and after that you get overtime, or you get some other kind of compensation. And so in France, if you’re a blue collar worker, let’s say you’re working in construction or something like that, you’re, yes, expected to stop working after 35 hours. But if you are a white-collar worker, so you work in an office, a BBC report from back in 2014 found that those folks generally did continue to work more than those 35 hours a week, often unpaid. But 50% of those blue-collar workers did file for paid overtime. So people do still work longer than 35 hours, it’s just the structure around it is similar to the way we think of 40 hours. So that’s on those numbers. But in terms of productivity in that time, you know, the OECD does keep track and they measure GDP per hour worked, which is one way to measure it. And in 2019, when they looked at France, they found that productivity rates grew in the manufacturing sector but stagnated in the service industries, which brought those numbers down. I mean, a lot of that has to do with other things going on in the French labor market, not just the work week that might be dragging down that productivity growth rate. But yes, the US is a touch more productive.

 

Kai Ryssdal: Hm. Fascinating.

 

Kimberly Adams: Hm. But who’s happier?

 

Kai Ryssdal: Yeah, well, that’s a whole, that’s a totally new podcast. All right. The final question comes from Paige, she’s in Wisconsin, who was wondering about the alcohol-free alcohol market. Here’s what she says. It seems like it’s getting bigger, both in NA beer, that is non-alcoholic beer, and zero proof spirits. But is that just my cyber bubble learning my preferences or is there really a growing market share? First of all, way to be aware, Paige, of your cyber bubble. Nice. Excellent. Nice. Very, very good. So look, it probably is a little bit of your bubble. But here’s the deal. And again, credit to the producers of this podcast for digging out these stats. The market for non-alcoholic beverages has been growing steadily, industry experts say it’s gonna grow by 5% by the year 2030. Any beverage that is not alcohol is what’s in there, not just fake booze, blah, blah, blah. Drizly, which is sort of an alcohol and beverage delivery service, has some stats. The NA category, non-alcoholic category, accounts for less than 1% of their sales, but it is their fastest growing category. 40% of Drizly customers want something with a lower ABV – alcohol by volume. And Gen Z apparently is more likely to purchase non-alcoholic spirits and beers than previous generations, which I just think is fascinating. Also, non-alcoholic beers are the most popular non-alcoholic alcohol choice. I will tell you, back when I first dabbled in non-alcoholic beers, which was a very long time ago, they were terrible. They were so bad. Now they’re better.

 

Kimberly Adams: I have a similar experience with like non-alcoholic, or alcohol removed wine, when I tried it like maybe five or six years ago, they were just all universally awful. At least all the ones that I tried. And there are some now that are quite good. And like especially when I’m making like a sangria or a mulled wine or something, I’ll often use the alcohol removed wines, because they bring that same flavor without like, you know, knocking people over. And I want to do a quick listener provided make me smart that I got on Twitter. So on Friday, I was complaining how my fancy cherries from my Manhattan got all weird in the fridge. And I was informed by one of our listeners on Twitter that they are not supposed to go in the fridge in the first place. And that is why they were messed up. So thank you very much for making me smart.

 

Kai Ryssdal: We wind up refrigerating a lot of things in my house that do not say refrigerate after opening and I take them out and I get yelled at, that’s all I’m saying.

 

Kimberly Adams: Well, use this as evidence to … yourself.

 

Kai Ryssdal: But I have a lot of podcasts! Alright, we’re leaving now. Thanks for listening. Back tomorrow. The news on a Thursday and some smiles as well.

 

Kimberly Adams: Yes, and in the meantime, keep sending your questions or your make me smiles. Our email is makemesmart@marketplace.org You can also leave us a voicemail at 508-U-B-SMART.

 

Kai Ryssdal: Make Me Smart is produced by Marissa Cabrera. Olivia Zhao is our intern. Ellen Rolfes writes our newsletters.

 

Kimberly Adams: Today’s show was kindly engineered by Drew Jostad, and Ben Tolliday and Daniel Ramirez composed our theme music. Our senior producer is Bridget Bodnar.

 

Kai Ryssdal: I don’t know about kindly. He just kind of sat there.

 

Kimberly Adams: He was kind to me. He was asking me about my welfare and well-being before you got on the line. He cares about me.

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The team

Marissa Cabrera Producer
Bridget Bodnar Senior producer
Tony Wagner Digital Producer
Marque Greene Associate Producer