California Fast Food Prices Soar As Minimum Wage Hike Takes Toll on Businesses, Workers, and Customers
“Since it took effect, job losses, reduced working hours, restaurant closures and higher prices for California’s inflation-weary consumers have been ongoing.”
The state of California seems hellbent on making life a living hell for middle-class residents, as evidenced not just by their soft-on-crime policies but by the minimum wage increase that went into effect at the beginning of April.
Though the $20/hour wage was ostensibly designed to help minimum wage workers, it has had the opposite effect, with fast food restaurants in the Democrat-run state slashing jobs and hours, implementing hiring freezes, and/or bringing in self-serve kiosks to ease the financial burden.
Something else they’ve had to do is raise prices on the food they serve, with prices going up as much as eight percent at some locations according to a new study:
Wendy’s has hiked prices by roughly 8% while Chipotle has raised prices by 7.5%, according to data from Kalinowski Equity Research and cited in The New York Post.
Taco Bell raised menu prices by 3% and Burger King hiked prices by 2%, the report found.
Seattle-based Starbucks increased prices by about 7% in California.
[…]
Chipotle raised the price of its Chicken Burrito by 8.3% and the Steak Burrito by 7%, while Burger King increased the price of its Whopper Meal by an average of 1.4%, according to KER.
Who saw this coming?
$20 minimum wage prompts fast food price increases in California. pic.twitter.com/v7BX4mdAMO
— Citizen Free Press (@CitizenFreePres) April 18, 2024
The California Restaurant Association correctly pointed out that all of this happening was very “predictable”:
In response to the price increases, the California Restaurant Association said they were the “entirely predictable” results of the minimum wage increase.
“Since it took effect, job losses, reduced working hours, restaurant closures and higher prices for California’s inflation-weary consumers have been ongoing,” the group said.
One California fast-food restaurant franchisee who owns 180 different restaurants announced this month that he would be rolling out self-service kiosks in all of his restaurants over the next 60 days:
Harshraj Ghai, who owns 180 fast-food restaurants throughout the Golden State, including Burger King, Taco Bell and Popeyes, told Business Insider last week: “We can’t move fast enough on this [rollout].”
“We have kiosks in probably about 25% of our restaurants today,” he said. “However, the other 75% are going to have kiosks in the next probably 30 to 60 days.”
“We are installing kiosks in every single restaurant,” Ghai said.
[…]
Ghai, who raised menu prices between 8% and 10% in the last year, said he plans to cut down on worker hours, eliminate overtime, pause plans to expand his restaurant empire and add more digital kiosks.
In December, California Pizza Hut franchisees laid off 1,200 delivery drivers.
And the Golden State is not alone, with the state of Washington seeing “the second highest price hikes for fast food menu items, which rose 6.1% during the same period.” This is thanks in part to a Seattle ordinance that went into effect at the first of the year that raised the minimum wage for gig workers, which ended up backfiring when people started deleting food/grocery delivery apps like DoorDash in protest of the insane add-on fees and price increases.
Unfortunately, the backlash to these wage increases will not dissuade one “Raise the Wage!” advocate from their position. Instead, they will just double down and stick their heads in the sand, all while demanding more wage increases to make up for the last one not having the intended effect:
This price increase hits people making the minimum wage the hardest. Obviously, the answer is to raise the minimum wage again. https://t.co/N0eb3Z8qSd
— RAMZPAUL (@ramzpaul) April 18, 2024
They never learn.
— Stacey Matthews has also written under the pseudonym “Sister Toldjah” and can be reached via Twitter. —
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Comments
Many of the fast food outlets are independently owned franchisees. There is no big corporation behind them to pay their pay bills. What happens to the franchisee with 7-8 years remaining on his 10 year lease? He can’t just shut down and walk away from his lease. The lessor can chase him for the lease term remainder, and they often have signed personal lease guarantee. That’s going to get ugly.
CA facing lost decade under dem super majority.
“Fast Food” was … WAS…. a fun option in California. Classic businesses sprang up ….. McDonalds, Del Taco, Taco Bell and local favorites as In-n-Out and Tommy’s. The last one neutral turf for the gangs. The “Old” California .. the really “golden” state is being buried piece by piece as Newsom and the Left dine at their own pleasure. California will eventually be as fun to live in as North Korea.
Of course fast food was in many ways spawned by the automobile culture so the current crop of CA leaders which doesn’t like ‘car culture’ hitting at not just autos with Cray Cray emissions standards but also at ‘auto adjacent’ industries like fast food seems logical.
Pretty sure their 15 minute City idea gonna require a far higher commitment to law and order than currently exists if they want folks to voluntarily give up ‘car culture’. Can’t realistically expect folks to walk around a 15 minute neighborhood littered with bums, feces, drug dens, panhandlers and other assorted societal ills for a family outing.
” Can’t realistically expect folks to walk around a 15 minute neighborhood littered with bums, feces, drug dens, panhandlers and other assorted societal ills for a family outing.”
Oh, yes they do imagine that. THEY won’t live there, of course. There will be walls to keep us in. Going outside the zone and suddenly our digital money won’t work….
Sure they do…. but it ain’t realistic as the out migration from many of these blue enclaves demonstrates. Even if some dystopian future awaits those in urban areas a digital currency/social credit system will have less impact on those in rural places who paid off their homes, don’t have a car note/consumer debt and who have PM and/or items/skills to barter for things they each want. Those without those things or those who decided to remain in a blue enclave will probably have a different experience.
When I was young 4 of us got together to do roofing jobs, netting about $15 an hour when minimum wage was about $1.60.
We rarely ate fast food, instead buying a loaf of a bread, sliced meat & cheese, or peanut butter and jell, and condiments and other toppings.
It was bar less expensive, and we ate like crazy.
That is what people in California, and the rest of Americans should be doing. I am stilling doing this today.
I was fascinated when I read The Millionaire Next Door. People with net worths in the millions buying their cars used (“by the pound,” as the author explained), shopping in discount groceries and thrift stores. Not miser or hoarder types, just people who understand that a Timex works just as well as a Rolex. I had both my kids read it, and they actually liked it as well. And they follow many of the habits to this day.
Geepers
Who could have ever foreseen that raising the minimum wage by govt fiat would ever have extremely negative effects?
If only someone would have warned them, time and time again.
People who have never had to meet payroll, making wage decisions that affect people who have to make payroll.
Well … Newsom has had to make payroll for several years now … he just does it with other peoples money …
The problem, of course, is that the minimum wage increase was too small. If CA had been bolder in increasing the minimum wage (like to $50/hour), then there would only have been positive effects. At least that’s what my economics text says.
While I don’t have immediate family left in California, I am sure that I have distant relations there. I am sorry, but I cannot be responsible for them, And I have an ex-wife there, which strikes me as fit punishment for both California and her.
With those caveats, right now I wish California all the due consequences of their own actions, with no quarter and no aid from the rest of the country. Let them be the bad example of what not to do.
Subotai Bahadur
Yes. A laboratory of bad decisions to help other states not make bad decisions.
Amen. The United Kingdom cannot be expected to do all the work.
Sorry, I meant to use the term “Commonwealth Nations,” not UK.
I did not intend to downplay the debt that continued US liberty owes to Australia, NZ, and Canada; for serving as invaluable bad examples of totalitarian weapons, vax, speech, healthcare, and banking policies that now the US is far less likely to permit here.
One of the happiest days of my life was when the sale of my house in CA closed. That was 2+ decades ago, it has more than doubled in value, and I don’t regret selling it for a second.
I despised paying property tax into that socialist hellhole, but I do miss the natural beauty of the place.
Your post perfectly describes how I feel about the recent sale of my Austin home.
My happiest day was putting that last item into my 5×12 U-Haul trailer, getting into the cab of my trusty Chevy pickup, twisting the key, and waving good-bye to the constant rent increases, an employer that valued my work but not enough to pay me enough to stay, much less what I was worth, and the prospect of more and more tax increases.
Can we let Cali secede, which they from time to time threaten to do? Put up a border, let them do it right per their preferences, and they can stop subsidizing the besotted rest of us.
We could let parts apply for readmission as new states, should they, and we want that.
You deserve a break today
So get up and get away, from California
Leave it yourrrr waaaaay…
chickens coming home to roost.
be a good bad example …
hopefully others learn …
Of course, given who is left in California, when the Marxists who control media, Hollywood and Big Tech blame the layoffs and price hikes on “greedy business owners”, the vast majority of Californians will believe them.
The vast majority of Californians have been spoon fed that drivel since day one in their child indoctrination centers, AKA public schools.
They are entirely self-sufficient in their stocks of socialist anti-logic now.
What comes next, I wonder?
Price controls?
Minimum employment laws?
Automation taxes?
Going-out-of-business taxes?
You’ve heard of slave labor, but we may soon see the emergence of a slave employer.
I imagine there actually may be an automation tax. The way they will do it is there will be a per machine license required just like the amusement licenses that are put on things like video game machines and other similar things like jukeboxes. Probably they will develop some scheme of how much revenue is each of those machines making and base the tax on that. And no, I’m not saying something here that’s pie in the sky; I actually think they will do it.
I hope to live long enough to see Portland put a tax on bicycles to pay for road repairs. Liberal screams are music to my ears. You should have seen the panic when they realized that cell phones meant a huge cut in revenue from taxes on the rented land for telephone poles. that was followed by them trying to tax satellite dishes which no longer needed telephone poles either. never did understand what the Mt Hood Cable Commission did with the tens of millions of dollars of revenue each year. They seem to collect taxes on everything but I never see any of it being spent for my benefit.
About a year before I left California, I purchased a flat-screen monitor. I paid something like $12.nn for an e-waste disposal “fee”.
The store did not know how I was to go about disposing of my old monitor; they had no idea how to go about disposing of it under the rules of this then-new
tax“fee”.I phoned my state representative’s office, and the young lady at the other end of the wire said she didn’t know, but would research it and get back to me. I figured I’d never hear a word. I was wrong. She phoned me back the next day, stating she had gone through the legislation and found nothing; she called the state capitol and they had no information, etc, etc.
Ultimately, I took the monitor out to the dumpster, tossed it in, and walked away.
I was stationed at Andrews AFB when mandatory recycling was implemented. We had to separate glass, cardboard, paper, plastics, and other disposables in designated color coded containers.
After diligent work complying with the mandate, I watched the trash truck roll up, and they proceeded to dump each container individually into the back of the truck, thus mixing all of the separated, color coded, differentiated disposables into the same area and compacted it.
I have never separated my trash from that way forward.
Even today, batteries go into the trash with bottles, cans, cardboard, televisions and other electronics. Paint? Same place. Oil? Same place
When a neighbor called me out on recycling, I told him to go fuck himself, and if he wanted my trash recycled, he was free to take my trash to his house and recycle it.
Yes. As many people here can see. I am a dïck.
A-yup.
“Mises gives an example of a price ceiling on milk. While those who enact such an intervention may intend to make milk more affordable for poorer families, there are many unintended consequences: increased demand, decreased supply, non-price rationing in the form of long queues at shops that sell milk, and, importantly, grounds for the government to intervene in new ways now that their initial intervention has not achieved its intended purpose. So, in Mises’ example, he traces through the new interventions, like government rationing, price controls for cattle food, price controls for luxury goods, and so on, until the government has intervened in virtually every part of the economy, i.e., socialism.”
What Are Mises’s Six Lessons?
Leftism is one stage thinking
Raise wages everyone makes more money, what could lc go wrong?
we lost a Golden Corral about 2 yrs ago… they told him to raise prices.
he told them he couldn’t . we live in a mostly rural/farmer/commute town
and people would not be able to afford the prices. they made him do it… he went out of business, and he
had put his home up as collegial.
so he was broke and homeless.
and the town lost a job creator and tax paying business. all because
some geek in a office somewhere
made a decision.
What’s wrong with y’all? You don’t recognize Utopia when you see it?
Damn! Is that what Utopia looks like?
I am sooooo sorry I didn’t recognize it. I guess it wasn’t appealing enough to me. 😉
Would that it stayed fictional.
At least the real world attempts are demonstrating what can’t work; what can’t be, for those of us willing to see.
And its going to shotgun out to take down a whole host of other businesses, because unions are already demanding ‘appropriate’ pay relative to the new minimum wage.
They’re trying to demand utterly unskilled workers get paid $30 an hour or they strike. And they’ll do it, and not care how many businesses have to close up because they can’t stay in business at that cost, because the unions care about THE UNION, not the union workers.
We are about 30 years ahead of, or behind, the UK depending on how you look at it. I guess no American autoworkers looked at th UK auto industry and thought, “hmmm, our unions could do this to us as well.”
I was watching a “how they make square tubing” video from Pakistan. Looked like a factory setting from the US in the late 19th century. Only a matter of time before some well-meaning liberals show up and put those guys out of a job, for their own good.
The UAW just achieved a victory at the VW plant downstate. At least the European auto worker unions work with the companies to achieve both the needs of the workers (within reason) and proper productivity.
The UAW has a history of adversarial relations with the company, up to and including assembly line sabotage of the product (Harley Davidson had a BAD problem with this), and some of the most asinine work rules around. I’m talking UK levels of asininity. The UAW goal is to unionize more of the German plants, and to do it with the Japanese ones as well. I’ll be watching the efforts at Nissan Smyrna; the UAW has tried since the plant opened over 40 years ago to get the workers on board. So far, they have not been successful.
Unemployed union members don’t pay union dues.
The true Wage Equity point will eventually occur when the maxinum number of affected workers are all making zero, otherwise known as the Maximum Automation point.
Time to put Unicorns on the menu.
They don’t care.
“They don’t care.”
Because they’re immune to the consequences.
Because they’re immune to humanity.
Like all other leftist ideas, they never consider the consequences of their actions. Almost all of their “Great” ideas end in misery for many who were supposed to be helped. The latest and most costly is the push for EVs. It is such a disaster that car companies are about to go bankrupt. Oh, but clean air! Now we all know that EVs are the opposite of clean air. Let’s raise the minimum wage so that low-income people can have more money to spend! D’oh! Now everything they buy costs more. How do these people get through life? If it wasn’t for government jobs these people would be homeless!
Why would anyone with any initiative work in government? Working in government means working with drones and idiots, many of whom were unemployable elsewhere. Being an entrepreneur, or at least a free agent in choosing your employer, affords you the opportunity to compete against drones and idiots, which is not only much more satisfying, but much more remunerative.
That ws traditionally true, but not anymore. Government is where the big money is, and where you don’t have to be intelligent or industrious to get it. Just amoral and corrupt.
Our government just has far too much money running through it. There is too, too much to steal. That, itself, is eating away at our society. The temptation of the easy riches of government is too much. Combine that with a society that has so many who are seriously lacking in integrity, self-restraint, or even the smallest smidgeon of decency, and you’ve got a recipe for complete disaster of Biblical proportions.
ramzpaul was being sarcastic in his tweet. I’ve noticed over here on the East Coast an increasing number of kiosks and self checkouts along with price increases. Grocery stores, box stores etc are all using self checkouts and pulling up the regular checkout lanes decreasing the number of workers needed.
This push for an increased minimum wage is proving that the true minimum wage is zero for a number of former people demanding more money for low wage jobs.
I typically will wait in line for
a cashier….I will support someone
who wants to work ….
I will as well, as I am not offered a discount for doing it myself.
More to the point, if you bring a lot of discounts to the store with you (coupons, rainchecks, military ID, etc..), the self-checkout device often has no clue as to how to process them.
“Taco Bell raised menu prices by 3% and Burger King hiked prices by 2%, the report found.”
“Help me! I’m starving!”
Oh JR we wish you were…. not to death of course, but just enough that you’re too weak to troll.
I notice that you only mentioned Taco Bell and Burger King; selectively choosing to ignore other data in the article
California-based fast food restaurants have hiked the price of menu items by as much as 8% in response to the $20-an-hour minimum wage law that went into effect April 1, according to a report.
Wendy’s raised its menu prices by around 8% while Chipotle Mexican Grill hiked its prices by approximately 7.5%, according to a report by Kalinowski Equity Research.
Starbucks, the Seattle-based coffee chain, raised the prices of its menu items at its California locations by around 7%, while Taco Bell hiked its prices 3%, the report found. …The report’s authors did the same for Chipotle, which was found to have boosted the price of its Chicken Burrito by 8.3% and its Steak Burrito by 7% at 25 locations in California between Feb. 7 and April 2.
McDonald’s appears to be the only fast food chain that has largely held off on raising its menu item prices, according to the report.
https://nypost.com/2024/04/16/business/california-fast-food-restaurants-raised-prices-due-to-minimum-wage/
I’d also like to toss in a little something that is tangentially related-
California’s unemployment rate is now the highest in the country, reaching 5.3 percent in February following new data that revealed job growth in the nation’s most populous state was much lower last year than previously thought.
See? Oh wait that’s using February data before stories like this one:
Franchise owners of the roughly 400 Pizza Hut and Round Table Pizza restaurants in California have already begun cutting a planned 1,280 delivery jobs this year, according to a Wall Street Journal report.