A whopping 98% of California fast food restaurants hiked menu prices and nearly 90% slashed employee hours in response to the state’s new $20-an-hour minimum wage law, according to a new survey.
The study by the Employment Policies Institute, a fiscally conservative, non-profit think tank, polled 182 fast food restaurant operators throughout the Golden State about the ramifications of the law, which was signed by Democratic Gov. Gavin Newsom and went into effect on April 1.
Conducted in June and July, the survey also found that not only had nearly all the restaurants raised their prices but that 93% plan to do so again next year. The study also found that 87% anticipate cutting employee hours within the next 12 months, a small drop from the 89% who said they chopped hours this year.
Nearly three in four — 73% — fast food locations reported that they have reduced employee shift pick-up or overtime opportunities, while 70% have either cut staff or consolidated positions.
“Even before the $20 wage went into effect, fast food restaurants made it clear they would not be able to survive. Now after just a few months, the policy has been a disaster, killing jobs and shuttering restaurants,” said EPI’s research director Rebekah Paxton.
Meanwhile, 67% of respondents said the new law will cost their restaurant at least $100,000 per location, while 26% expected a $200,000 hit to their bottom line at each of site.
When asked if the new minimum wage law would make them think twice about expanding in California, 73% said it would make them “significantly less likely” to grow in the state.
Nearly three in four — 74% — said there is a greater likelihood that they would shut their restaurants down, the survey found.
The push for higher wages led several major chains — including McDonald’s, Burger King, and even low-cost favorite In-N-Out Burger – to raise prices to or cut hours to offset higher labor costs.
Others, like beloved Tex-Mex chain Rubio’s California Grill shuttered 48 locations, citing the “rising cost of doing business”
A spokesperson for Gov. Gavin Newsom told The Post: “This is a bogus online survey conducted by a DC lobbying firm that’s funded by corporate restaurant chains — all to protect their profits.”
“Federal government data shows the actual facts here — fast food jobs have increased every month this year, including since California raised the minimum wage for workers,” the spokesperson said.
Last week, fast food workers in the state asked for another minimum wage increase.
The California Fast Food Workers Union — a branch of the Service Employees International Union (SEIU) — released a new list of demands at the first-ever meeting of the state’s Fast Food Council.
The union is asking that wages for workers be raised to $20.70 per hour by Jan. 1, 2025, “to keep up with the rising cost of living,” the SEIU released in a statement to the outlet.
As a result of the law, visits to popular chains such as McDonald’s, Wendy’s and Burger King plunged.
Since April 1, foot traffic at Burger King fell 3.86%, while Wendy’s was down 3.24% and McDonald’s slipped 2.5%, according to a report by analytics firm Placer.ai.
In-N-Out Burger saw 2.59% fewer customers while Jack in the Box visits were down 0.8%.
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