A Blog by Jonathan Low

 

Apr 15, 2022

Pizza Slice Cost Exceeds NY Subway Fare For 1st Time

The dollar slice, of blessed memory, is no more due to rising ingredient costs. 

But at least subway fares are holding steady. JL 

Amelia Pollard reports in CityLab:

The “pizza principle,” a mainstay of New York economics for more than four decades, states that a slice of cheese pizza will always be the same price as a subway ride. The rule has largely held true since first conjectured in 1980, with any increase in pizza prices tending to predict a matching hike in public-transit fares. Prices for plain slices are above $3 throughout the city along with commodity and labor costs. With the Metropolitan Transportation Authority freezing fares at $2.75, the gap between the price of riding downtown and late-night hunger pangs is growing.

The “pizza principle,” a mainstay of New York economics for more than four decades, states that a slice of cheese pizza will always be the same price as a subway ride.

The rule has largely held true since first conjectured in the New York Times in 1980, with any increase in pizza prices tending to predict a matching hike in public-transit fares.

Not anymore.

Prices for plain slices are soaring above $3 throughout the city along with commodity and labor costs. With the Metropolitan Transportation Authority freezing fares at $2.75, the gap between the price of riding downtown and satisfying late-night hunger pangs is growing quickly.

“Stop, stop, stop, stop, stop!” shouted Paul Giannone, the owner of a Greenpoint, Brooklyn, slice shop that bears his nickname, Paulie Gee, when asked about the pizza principle. “I’ve been talking about that for forever. And now there’s a divergence.”

 

The MTA initially planned to keep transit fares unchanged for six months, a period ending in July, while waiting to receive billions of dollars in aid from President Joe Biden’s federal infrastructure bill. But New York Governor Kathy Hochul took things a step further: Her proposed state budget includes funding that will avert fare hikes for the rest of this year, according to an MTA spokeswoman.

For New Yorkers, slices are part and parcel of living in what Jon Stewart famously called a “pizza mecca.” And pizzerias—much like subway cars—are some of the only spots where New Yorkers from all walks of life rub elbows with one another.

“Pizza is so deeply loved in New York that everybody eats it and everybody has to go to the same places to get it,’’ said Colin Hagendorf, who co-owns Macosa Trattoria in Brooklyn and spent two years reviewing every cheese slice in Manhattan for a book called “Slice Harvester.”

Pizza provides an affordable bite in an expensive city. Of course, some prices have stayed almost impossibly low, with 99-cent slices still scattered throughout Manhattan, and some pizzerias keeping their cheese slices at $2.75—at least for now.

But the average slice of cheese pizza—known locally as a “plain” or “regular,” depending on whom you ask—costs far more today in the city: $3.14 on average, according to Slice, a New York-based online ordering service for independent pizza parlors. This year, prices in all five boroughs are above $3 for the first time ever, the data show, with Manhattan clocking in with the highest average, at $3.26.

Borough Inequalities

The average price of a pizza slice varies greatly across New York City, but prices have increased everywhere
Choropleth map of the five boroughs. The darker the shade, the more pizza prices have increased between 2019 and 2022. Staten Island is the darkest, then Brooklyn and Queens, then Manhattan and Bronx.

Percentage change in price

between 2019 and 2022

BRONX

10

20%

$3.15

MANHATTAN

$3.26

on label

Price per

QUEENS

$3.10

BROOKLYN

$3.06

STATEN

ISLAND

$3.12

Source: Slice

Over the past year, inflation has put more and more pressure on pizzerias and their slices. During that time, the average price for utility gas, which often heats eateries’ hulking ovens, has surged 24% for urban consumers nationwide, according to the U.S. Bureau of Labor Statistics.

Paulie Gee’s has one natural-gas oven, and Giannone says his bills have skyrocketed. “Frankly I just have so much going on right now I haven’t been able to really fight it with them,” he said.

Pizza Ingredients Get More Expensive

U.S. Consumer Price Index, 100 = Average price from 1982-1984
  • Public transportation
  •  
  • Tomatoes
  •  
  • Flour
  •  
  • Cheese
  •  
  • Fat and oil
  •  
  • Electricity
Consumer Price Index prices for all pizza ingredients have increased steadily since the 1980s, especially for tomatoes (from 100 in 1982 to 350 in 2021). Public transportation inflation went down in 2017 and now hovers around 230.
Source: U.S. Bureau of Labor Statistics

Ingredients have become costlier, too. Cheese prices haven’t increased as fast as those of other food items during the pandemic, but they’re still up about 10% over three years, according to the bureau. Among ingredients, flour has emerged as the biggest pressure point: Its price has risen 11.6% in the past year alone, the most in more than a decade.

Then there’s labor. Average wages in the city’s food industry have climbed 7.9% from a year earlier as of Sept. 30, the latest date for which figures are available, according to the New York State Department of Labor. Giannone said he’s boosted wages for his front-of-house staff by 50% since before the pandemic.

All those costs have cut into pizzerias’ bottom lines, forcing the shops to raise prices. Pizza Palace—a mainstay for 75 years in Inwood, at the northern tip of Manhattan—increased its price to $3.25 from $3 in October. And while the cost of a cheese slice will now stay fixed for the foreseeable future, specialty slices may see price hikes soon, said Panos Kakanas, a son-in-law of owner John Kambouris and one of the pizzeria’s de facto managers.

“We talk about raising prices on a daily basis,” Kakanas said.

Some pizza customers said they’re feeling the pressure of inflation. Daphney Lopez, a 19-year-old senior at the High School of Art and Design in midtown Manhattan, goes for lunch at Little Italy Pizza on Third Avenue a couple times a week. “I’d rather go to a 99-cent place,” she said, but doesn’t know of one right near school. Her friend Willa Johnson, 17, also a senior, said she learned about the pizza principle in an economics class. “I didn’t realize it was a real thing.”

Some parlors haven’t gotten around to raising prices just yet, but with costs swelling and competitors jumping higher than $3, they’re likely to follow suit. And customers used to seeing everything from gas costs to grocery bills shooting up won’t balk at yet another price increase, several pizzeria owners predicted.

“You can say a regular slice was $3.75, but it’s going to $4,” Giannone said. “I’m going to tell my manager to change it as soon as we get off the phone.”

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