Menu prices throughout California's fast food chains, particularly the cost of burgers, fries, and other fast food items, have risen following Monday's implementation of a new law mandating a $20-per-hour minimum wage for workers.
A recent investigation by the New York Post uncovered that certain fast food chains in the Los Angeles area implemented price hikes on April 1, after the enactment of new California statewide legislation, which went into effect on Monday. The legislation mandated a $20 minimum wage for restaurants with at least 60 locations nationwide. However, exceptions were made for establishments that produce and sell bread.
AB 1228: The Minimum Wage Increase Law and Fast Food Council
AB 1228 was signed by Governor Gavin Newsom into law in September, establishing a Fast Food Council comprising representatives from workers and employers with the authority to approve additional wage increases and establish working condition standards alongside the pay raises.
READ ALSO : California's Fast Food $20 Minimum Wage Starts on Monday: How Bad Will It Hurt Businesses?
Burger King's Abrupt Price Increase
According to the Post, a Texas Double Whopper meal at a Burger King surged from $15.09 on March 29 to $16.89 on April 1, marking a significant increase of $1.80 (nearly 12%) for the same meal.
The price of The Big Fish meal increased from $7.49 before April 1 to $11.49 after, marking a $4 (53%) increase. Additionally, according to the report, most other items saw price increases ranging from 25 cents to a dollar.
Burger King was not the only one making price changes. Kevin Hart's restaurant, Hart House, also increased prices, with large fries going from $4.49 to $5.99, milkshakes now cost $1, and sandwiches have a 50-cent ingredient cost.
Customers' Sentiments Over Price Increases
While purchasing a meal at Burger King, Ivan Moreno expressed discontent, stating that the wage increase would lead to higher prices for everything else.
Despite the prices at Chick-fil-A, Wendy's, and McDonald's remaining unchanged due to the minimum wage increase, a McDonald's franchisee informed CNN Business that the wage increase had impacted his restaurant.
McDonald's franchise owner Scott Rodrick emphasized the need for thorough consideration when faced with a sudden 25% wage increase. He acknowledged the challenge of adjusting prices while ensuring they remain within customers' affordability.
Over the past three months, Rodrick has increased menu prices by 5% to 7% in anticipation of the new law taking effect.
The Scope of The AB 1228 Law
Democrats in the state legislature passed the law last year, which raises the wages of over 500,000 individuals employed in fast food establishments.
In 2022, the median wage for fast-food workers in the U.S. was $13.43 per hour, while it averaged $16.60 per hour in California. With the new minimum wage taking effect, workers could earn an annual salary of $41,600.
The law pertains to restaurants that provide limited or no table service. These restaurants must be affiliated with a national chain comprising at least 60 establishments nationwide.
