It appears that the US government's generous unemployment benefits are creating a widening labour shortage in the fast food industry, threatening to set off an even bigger "inflationary time bomb" and send Big Mac prices soaring.

The National Owners Association (NOA), an independent advocacy group of McDonald's franchisees, sent a letter to its members warning of growing hiring challenges in wake of the "perverse effects of the current unemployment benefits." According to the group, increasing wages, offering signing bonuses, and even paid interviews are no longer enough to captivate new employees, as generous unemployment benefits continue to exacerbate the ongoing labour shortage.

The letter brought attention to last week's nonfarm payrolls employment miss, which showed that there were only a mere 266,000 jobs added in April— alarmingly worse than the consensus forecasts calling for at least 1 million. "What's going on here? When people can make more staying at home than going to work, they will stay at home," the letter said, which was later quoted by Business Insider.

The NOA Board advised its franchisees to further raise pay and benefits in an effort to entice new workers. The additional costs of labour is expected to be passed down to consumers, via higher Big Mac prices. "Inflation is the flip side to all of these changes," the letter explained. "Price increases are happening everywhere you look and will continue as employers pass along these added costs. We will do the same. A Big Mac will get more expensive."

Information for this briefing was found via Business Insider. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.