In-N-Out Burger and the Most Important Principle of Economics

Managers at In-N-Out Burger earn far more than their fast food rivals to oversee operations at the popular California-based chain, according to a report this week.

The average In-N-Out store manager rakes in $160,000 per year – roughly triple the salary of managers at other fast-food chains in the state of California, the California Sun reported. Their pay also tops that of employees in traditionally lucrative occupations like architect (about $112,000) and lawyer (about $115,000).

“In-N-Out is just eons above everybody else,” said Saru Jayaraman, head of the Food Labor Research Center at U.C. Berkeley. “On wages and benefits, they really are the best large chain.”

Aside from the higher-than-average pay for store managers, In-N-Out also offers $13 per hour for its workers to start, above California’s statewide minimum wage. Workers are also eligible for 401(k) plans, health benefits and paid vacation.


If you like fast food burgers, and if you’ve had In-N-Out Burgers, you’ll understand why they’re successful.

Some will claim that In-N-Out is “progressive”, meaning that its owners don’t care about profits, and therefore treat the employees better.

Anyone who thinks such a thing has no remote grasp of how a business works.

Businesses succeed for basically two reasons. One, the product or service they provide is of high quality. Two, the product or service they provide is scarce enough relative to demand that it’s profitable.

The point here: Without profit, there are no employees to treat well.

That’s why we need capitalism. Capitalism creates the atmosphere and incentive for people to do well and for satisfied customers to communicate their satisfaction through paying the price requested.

No government planner or academic scholar will ever be able to do this.

As the brilliant free market economist Ludwig von Mises figured out way back in the 1940s and 1950s when the rest of the world scratched their heads over the disappointments of central planning under Communist and Nazi regimes, you can’t have a robust economy without rational calculation on the part of actors in that economy.

As the brilliant philosopher and novelist Ayn Rand figured out long before the fall of Communism in her home country of Soviet Russia, you cannot remove (or undercut) reason and individual ingenuity without causing the entire economic system – and ultimately civilization itself – to collapse.

The mind matters.

That’s what von Mises and Rand figured out, and it will always be true.

The ridiculous fighting back and forth between Democrats and Republicans today over deciding (1) how the deck chairs should be arranged on the sinking ship called The S.S. Swamp, and (2) who should get to arrange those chairs, matters little next to these profound and important discoveries.

We ignore them at our peril.

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