“Why are the prices rising?” ask many waiting in line in the cafeteria. They’re right— burgers, once well within ₩5,000, set us back ₩5,800, and Korean meals jumped more than ₩1,000 to ₩5,200 in a two-year span. As someone who had been at KIS since the entry of Hyundai Green Food as the school’s official caterer, I’ve felt the impact of the gradual increase of lunch prices. However, we tend to view these price increases as something unjustified that’s done merely for the increase of profits and in the spirit of greed. The economic trends in recent years offer sufficient explanation.
First, it must be established that Hyundai Green Food’s dependence on the Korean economy is significant. Despite the fact that the company tends to source its beef from Australia and certain types of rice from Vietnam, its ingredients are mostly grown or raised in Korea; fluctuations in prices of ingredients in Korea will most certainly impact Green Food. Since the 2000s, South Korea’s minimum wage has been steadily increasing until the past few years, where President Moon Jae-In’s economic policies in recent years have driven the minimal wage up in dramatic increments.
The first conclusion that can be drawn is that the Hyundai Green Food is probably paying higher wages to the cafeteria workers in order to keep up with the rising minimum wage. Of course, this change is advantageous for our cafeteria’s workers, but not for the company. Low-cost labor keeps its products and services cheap and accessible to a larger audience. Then, we must consider Green Food’s supply chain.
This supply chain involves agriculture and animal husbandry, labor-intensive fields of work that involve many unskilled laborers that are often paid low (sometimes, illegal) wages. Prices for agricultural and animal products are determined by numerous factors, the some of the most important of which are the production and circulation costs, both of which are directly impacted by the Moon administration’s wage increases. The produce and livestock companies that supply Green Food have to pay higher wages to the manual workers that grow and raise the products and the truck drivers that drive the food to wherever it needs to go; these wage increases ultimately drive the costs of food up due to the fact that companies increase prices in order to cover for the additional expenses the increased salary incurs. In summary, with every step of the food’s journey from the field to the cafeteria, the current economic situation forces increased expenditure by all the parties involved, a chain reaction which makes its way to us and forces us to pay more for lunch. So, to those that say that these price increases are motivated by corporate greed, here’s your answer. Don’t jump to conclusions.
— William Cho (’21)
Sources will be provided upon request.
Image: Hyundai Group