California Fast Food Chains Widely Increase Prices Following Wage Hike, Survey Finds
Customers have seen prices rise—sometimes significantly—since April 1, when California’s minimum wage for fast food workers was raised from $16 to $20 per hour.
The Employment Policies Institute conducted a poll in June and July to see how hiking the minimum wage affected 182 restaurant proprietors in the Golden State. It was held online and involved limited-service restaurant proprietors and partner associations.
The EPI is a non-profit think organization led by a restaurant industry lobbyist who has opposed minimum wage increases.
According to the report, 67% of restaurant operators believe the wage rise will cost them at least $100,000 per site. Approximately one-fourth thought it would cost more than $200,000.
The vast majority of restaurant operators (98%), indicated they had already increased menu prices. Approximately 89% indicated they had decreased employee work hours, 73% said they had limited overtime or pick-up opportunities, and 70% had reduced or consolidated staffing.
Furthermore, 92% of survey respondents expressed concern that increased menu pricing would result in decreased “foot traffic.”
The minimum wage increase also influenced owners’ opinions on future expansion in California, with 89% stating they are less inclined to open new stores and 59% saying they are more likely to expand overseas.
Trade groups and some political pundits believe that the wage increase has resulted in job losses and forced restaurant closures, while the Service Employees International Union and Gov. Gavin Newsom’s office point to data showing that the industry added thousands of jobs between April 1 and June 30.
While they hail the $20 minimum wage as a triumph for hundreds of thousands of fast-food workers, SEIU leaders remain dissatisfied. The union is asking California’s newly formed Fast Food Council for a 70-cent rise beginning January 1, 2025.