Fast food prices are surging in California as an increase in the minimum wage for fast food workers to $20 an hour comes into force. Companies such as McDonald’s, Chipotle, and Jack in the Box warned that the policy would lead to price rises when it passed in September, and they are now being realized.
Prices are up 10.6 percent at Chick-fil-A, 7.8 percent at Starbucks, 7.7 percent at Shake Shack, 6.9 percent at Chipotle, and 4.1 percent at Taco Bell, according to an analysis of menu prices in Los Angeles, Sacramento, San Diego, and San Francisco.
Market research firm Datassential found that big-name chains such as McDonald’s, Burger King, Pizza Hut, Domino’s, and Jack in the Box have also increased prices.
Initiative 82, a similar wage-hiking scheme aimed at tipped workers in Washington, D.C., has had similarly harmful effects. Despite an increase in base pay, some workers in the District are now taking home less money, as fewer people eat out and those who do tip less, due to employers increasing prices and adding surcharges to bills to meet payroll costs.
Many tipped workers in D.C. have simply been laid off, with a majority of restaurateurs saying they will have to fire staff and a third saying they will close venues due to their businesses becoming unprofitable.
With inflation already ticking upward again, such policies will only add to American consumers’ difficulties ahead of the November 2024 election.
