A recent Bentley-Gallup Business in Society survey found that 90 percent of Americans believe businesses should make the world a better place, 95 percent believe they should improve their communities, and 92 percent believe they should offer flexible work arrangements whenever possible. Yet 80 percent believe businesses have raised prices more than necessary to increase profits.
As the chief financial officer of a restaurant group operating in Santa Barbara and Ventura counties, I find the contrast striking. Americans expect businesses to do more, provide more, pay more, and contribute more. But when the costs reach consumers, businesses are often accused of greed. Have we stopped connecting the dots between what we demand and what those demands cost?
Where Does the Money Come From?
Consider what it takes to operate a California restaurant. Before an owner earns a dollar of profit, the business must pay employees, purchase ingredients, maintain equipment, carry insurance, pay taxes, cover rent and utilities, and comply with employment and safety requirements.
Those expenses do not disappear because customers want lower prices. When wages increase, insurance premiums rise, or new regulations require additional administrative work, operators must cover those costs somehow. Sometimes that means greater efficiency or lower profits. Sometimes it means raising prices. A restaurant can increase its menu prices and still make less money than it did the previous year. Customers see the higher price of an entree, but rarely the financial statement behind it.
Our Votes Have Consequences
The policies we support as voters can also contribute to the prices we pay as consumers. Higher wages, expanded benefits, environmental protections, and stronger workplace rules can serve worthwhile purposes. But worthwhile purposes still have costs.
When we support policies that increase employer expenses, we help shape the financial conditions under which businesses operate. That does not mean government policy explains every price increase. Food costs, energy prices, supply disruptions, and individual business decisions matter too. But we should be willing to examine the relationship between our policy preferences and their economic consequences.
What Are We Willing to Give Up?
The survey also found that 40 percent of Americans would support businesses reducing product sizes or quantities to control costs, while only 5 percent supported reducing quality and 4 percent supported reducing employee pay and benefits. These preferences are understandable. Nobody wants smaller portions, poorer quality, or lower wages.
But customers also want affordable prices, generous portions, quality ingredients, attentive service, and well-compensated employees. Businesses want to deliver those things. When the economics no longer work, however, there are trade-offs: prices, portion sizes, service models, productivity, expenses, or profits. Pretending those trade-offs do not exist will not eliminate them.
Businesses Already Contribute
What does it mean for a business to make the world better? A restaurant that employs local residents supports households. A restaurant that buys supplies supports other businesses. Taxes help fund public services. Dining rooms give families and neighbors places to gather, celebrate, and reconnect.
These contributions may not be advertised as sweeping social initiatives, but they are real. A business does not need to solve every social problem to provide meaningful value to its community. And those contributions cannot continue if the business becomes financially unsustainable.
Responsibility Goes Both Ways
Businesses should operate ethically, treat employees fairly, follow the law, and provide honest value. Consumers and voters also have a role: understanding that the standards we demand may carry costs, considering the consequences of policies we support, and recognizing that profitability is not automatically evidence of greed.
Profit allows businesses to survive, reinvest, employ people, and serve their communities. Without it, those contributions eventually disappear.
The Bentley-Gallup survey tells us what Americans expect from businesses. A valuable next question is whether respondents understand the financial trade-offs involved in meeting those expectations. We cannot assume they do not; we should ask.
The issue is not whether Americans should expect businesses to behave responsibly. They should. The issue is whether we are equally willing to acknowledge our role in creating the conditions under which businesses operate.
The next time we question why something costs more, perhaps we should also ask what we have demanded, what we have supported, and what we are willing to pay for. Building a better society is a shared responsibility.
Erica Schmidt is the chief financial officer of Genuine Restaurant Concepts.
