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On Monday, California’s fast food minimum wage increase of $20/hour went into effect, and it’s starting to have a ripple effect, as customers experiencing sticker shock at the register, turn their backs on their favorite chains.
And now even schools are adding their piece to the conversation, worrying that cafeteria workers will abandon ship for a “cushy” fast food gig.
Carrie Bogdanovich, president of the California School Nutrition Association said: “They are all very worried about it. Most are saying they anticipate it will be harder and harder to hire employees.”
Golden State residents have been taking to social media to sound off on the new prices at some of their local fast food chains.
Fast Food Prices Leap On April 1st
One Redditor, stated, “This is ridiculous. I can’t afford to eat fast food anymore if prices keep jumping like this.”
One Reddit user on the Wendy’s sub said, “A Biggie Bag went from $5 to $6. That’s a 20% increase overnight!“
Another Redditor said: “They’re making record profits, and they’re still raising prices. It’s all about corporate greed.”
And another: “They’re just raising prices to cover the cost of the higher minimum wage.”
One customer made a farewell post to Wendy’s stating they made their “last trip for a long time.” They noted the Biggie Bag deals had gone up in price again from $7 to $8 (among other items), even though their local Wendy’s had already eliminated multiple workers to make up for the wage increase.
So why are they raising the prices if they’re saving money running the show using the minimum amount of workers?
There are two lines drawn in the sand over the wage increase. The side that blames fast food companies raising prices due to corporate greed. And the side that says the increase in pay has created an unfair situation for franchisees to cover the costs of doing business. And as such, they need to recoup those losses somehow.
The sceptics are shouting to the rooftops: “Fast food companies are making record profits. It’s all about corporate greed.” It’s hard to disagree if chains are operating using the bare minimum employees needed. And then there’s the notion that large corporations should be able to absorb some of the wage increase without resorting to price hikes.
The full impact of the minimum wage increase is unfolding in real time, and some fast food chains in California have already demonstrably raised prices. Reports indicate Burger King, Starbucks, Chipotle and In-N-Out have all been affected.
A few months ago, chain were already putting measures into place (paring down on employees) ahead of April 1st. Pizza Hut laid off 1200 delivery drivers in California, opting instead to rely on third-party deliver apps like Uber Eats, and Doordash.
What The Future Holds
This trend of rising fast food prices is likely to continue as the cost of doing business continues to rise, and fast food chains will be forced to raise prices in order to maintain their profit margins. This will lead to sticker shock for consumers, who may (and have already) start to look for cheaper alternatives.
And it’s not just in California, the fast food landscape is changing nationwide as more customers become disillusioned with the state of their favorite chains rising prices. Now more than ever, people are opting instead to stay home, and cook. And it’s starting to impact sales.
Will consumers adjust their spending habits? Will the increased wages lead to a happier, more productive workforce for these restaurants? Only time will tell how California’s experiment with a higher minimum wage plays out in the land of golden arches and double cheeseburgers.
