Students often complain at the high price of dining hall swipes — which amount to about $12 each — when they can buy a Chipotle burrito for just $8. Add-on visits can cost up to $15 a swipe on the most popular plan. There are a few theories of why this is the case.
While Penn Dining says union labor drives up the costs, economics researchers think it might be the effect of having a monopoly or a tool to price out upperclassmen.
Executive Director of Business Services Doug Berger said the primary driver of dining hall costs is unionized labor. 30 percent of dining hall expenses go toward the cost of food, 44 percent goes to labor costs and 26 percent are direct expenses, such as utilities. One hundred and twenty-one Penn Dining staff members are unionized under Local 54, Berger said.
Penn Dining Advisory Board Chair Brianna Krejci, who is also the president of the Penn Vegan Society, does not support the structure of Penn Dining’s union. “I’m significantly less in support of the union structure as it applies to dining at Penn,” she said.
Krejci said the union prevents Bon Appetit from asking staff members to do additional work and reduces the incentive for employees to be innovative on the job. The union structure “allows people to exist at the bottom-level,” she said. Krejci also noted that the union rules might lead to overstaffing, which would exacerbate cost problems. On Sunday at Hill brunch, around 20 employees appeared to be on duty at one time.
Krejci said she supports living wages, but believes that the university can engage in corporate social responsibility and pay employees fair wages, without having to be bound by the strict rules and regulations that surround unions.
This year, Krejci purchased the “Take Your Pick” meal plan, which offers a flexible number of dining dollars and swipes. Next year, she will move off campus and not buy a meal plan. “I am the chair of the dining advisory board and I care a lot about what Bon Appetit does but I can’t afford a meal plan next year.”
Krejci estimates that the cost of a meal plan is a financial concern for around 35 percent of students. Particularly for the 13 percent of students whose families earn less than $50,000 a year, Krejci said it makes more sense not to buy a meal plan and instead use that money for the cost of living in Philadelphia.
Overall, Berger said Penn offers the third cheapest dining plan among its peer institutions. Only Brown and Dartmouth offer less expensive dining plans, but both require students to purchase a meal plan for either three or four years. Stanford’s dining plan is $1,000 more expensive, he said.
Whether PennDining’s larger mission to serve students justifies higher prices is up for debate.
“I don’t necessarily think the dining hall food allows me to always choose the food that I want to eat,” Wharton freshman Emily Zhen said. Zhen does not plan to buy a meal plan next year. “Maybe if it was like $5 a swipe, like if it was the equivalent of a food truck, which, in my opinion, gives better food and more variety and convenience,” she said.
Wharton freshman Billy Kacyem said he plans to buy a dining plan for sophomore year. “I might do the one where you can pick your own swipes and dining dollars. I feel like I have a better idea of how much I eat now.”
Kacyem said the price of meal swipes will not affect his decision. “I think the pricing is just something that I can’t control, so I just take it as a given,” he said.
Despite Penn Dining’s claims that union labor is the main cost differentiator, not everyone is so sure that this is the case.
Over a dining hall dinner, Yanhao Wei, an Economics Ph.D student who studies the movie industry, said he believes that high dining hall prices force upperclassman out of the market.
It is possible that “the university doesn’t want seniors and juniors to come to the dining hall or live in the dormitory,” he said.
Wei said that higher prices might be a way to allocate limited capacity. “Maybe because they have limited space ... they increase price,” he said. “They want first year[s] to come here, to socialize or whatever, but maybe they want to discourage the second or third year student.”
Penn Dining did not respond to repeated requests for specific data on the breakdown of dining hall expenses.
Director of the Microeconomic Principles Program in the Economics Department Rebecca Stein said Wei’s hypothesis is “internally consistent.” She said it is also plausible that increased pressure from students to provide higher wages for Penn Dining staff bumps up the price. She noted that students have no incentive to propose lower prices since their parents, the federal government and society will foot the bill.
Stein also said there is a third hypothesis that could explain dining hall prices. Because Penn Dining is a monopoly, she said it is possible that high prices are simply a method of extracting increased revenue from Penn students. While Penn in a non-for-profit, it still has incentives to generate revenue, whether for increasing financial aid or building a new building.
At the end of the day, Berger said that Penn Dining breaks even. Penn Dining is “mission driven by the university,” he said. Penn Dining, along with the Dining Advisory Board, recently added Hill Express to address the concerns of student athletes who did not finish practice in time to swipe in at a dining hall.
Berger added that Penn Dining offers better quality food than retail competitors. Comparing Penn Dining to Wawa, Berger said, at Penn dining halls the food is always fresh. Krejci agreed, noting that Penn Dining offers works hard to provide students with balanced meals.
“If we were financially-driven, we might make some different decisions,” Berger said. Many retail institutions don’t provide employees with sick days and serve frozen or low-quality food, he said. PennDining and Bon Appetit partner with farms to guarantee a sustainable process from the farm to the table.
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