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Tue August 14, 2012
What A Very Old Menu Tells Us About The Price Of Steak
Originally published on Tue August 14, 2012 10:08 pm
Delmonico's, the New York City steakhouse, has been around forever.
The New York Public Library's archival menu collection doesn't go back quite that far. But it does have a Delmonico's menu from 1918. The archive also, sort of randomly, has a Delmonico's menu from 1988. Delmonico's current menu is online.
One item that's on all three menus: filet mignon.
This allows us to ask an interesting (to us) question: How has the price of filet mignon changed over the past century? Here's the answer, adjusted for inflation.
So the price went way up between 1918 and 1988 — then it fell significantly. What drove the price changes?
A restaurant's costs can be split into three buckets: food, labor, and everything else (rent, insurance, marketing, etc). Each bucket accounts for about a third of a restaurant's costs, according to Arno Schmidt, a former executive chef at the Waldorf-Astoria who has worked in kitchens since 1946.
The "everything else" bucket is hard to parse — there are, obviously, many details we don't know. Still, we can look at the price of a pound of steak and the price of labor over time.
The price of a pound of steak held pretty steady between 1918 and 1988. Then it went way down between 1988 and 2012. (We discussed the decline in meat prices in our post, What Americans Spend On Groceries.)
The price of labor — hourly wages for service-sector workers — rose significantly between 1918 and 1988. Then it flattened out, as wages stagnated. (We couldn't find a data set for this that runs from 1918 through the present — the best one we could find ends at 2002 and is rather inconsistent. If you know of a better one, let us know.)
Taken together, there's a pretty coherent story here — and one that resonates with broad shifts in the U.S. economy. Over the course of the 20th century, rising wages drove up the price of a filet mignon at Delmonico's. In recent decades, wages stagnated while beef prices declined, and the price of filet mignon fell.
Note: We called Delmonico's about this post. They told us the owner of the restaurant was out of town and not available to comment.