Did Doritos Locos Tacos Create 15,000 Jobs?

Moneybox
A blog about business and economics.
April 22 2013 12:44 PM

Taco Bell Says Doritos Locos Tacos Have Created 15,000 Jobs

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A Taco Bell and Pizza Hut in Los Angeles

Photo by Kevork Djansezian/Getty Images

Taco Bell's Doritos Locos tacos have been a big hit product, but assertions that they're responsible for the creation of 15,000 new jobs are a textbook illustration of the difficulty in making macro-inferences from micro-phenemona:

Creed explained how one taco, the Doritos Locos Taco, helped create 15,000 jobs for the Yum! Brands subsidiary. Taco Bell says it has 150,000 team members in its restaurants nationwide.
“It’s very possible because two things happened. One is we grew the business,” he said, adding that Taco Bell’s sales grew by 8 percent last year.
Second, it helps if you add two or three employees to each of Taco Bell’s 6,000 locations.
“And that’s great, it makes us feel really good,” he said. “It’s great we sold lots of tacos and it’s great for our shareholders, but if you can get 15,000 people off the unemployment line and give them jobs -- that to me is giving back to society. That is having a social conscience in doing the right thing. That’s really important to me.“
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The observation here is that Doritos Locos tacos helped lead to surging Taco Bell sales, then Taco Bell added a lot of staff to meet that rising demand. And good for Taco Bell. But presumably some large fraction of those sales either displaced sales at other fast food establishments or else displaced nonfood purchases. People might be cutting expenditures on cable television or movie tickets in favor of Netflix and plowing some of their savings into buying more meals outside the house. The impact of any particular firm's successes on overall levels of employment and output is totally ambiguous.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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