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McDonald's says fast food sales are suffering most in California
By Grace Dean,
8 days ago
McDonald's raised menu prices in California to offset the state's $20 minimum wage for fast-food workers.
Allen J. Schaben/Los Angeles Times via Getty Images
McDonald's says fast food sales are suffering most in California.
McDonald's raised menu prices in CA to offset the state's $20 minimum wage for fast-food workers.
"It was a piece of very lopsided legislation that was targeting one industry," Kempczinski said.
McDonald's CEO says fast food sales are suffering in California as menu prices increased to offset the state's $20 minimum wage for fast-food workers.
"You're seeing in California, the business there is falling off to a greater degree than what you're seeing in other markets around the US," CEO Chris Kempczinski told CNBC's Squawk Box.
"We've had to do everything in the playbook , basically, in California, from finding productivity opportunities in the restaurants, looking at staffing, looking at hours , and then, yes you do have to look at pricing ," he said.
California raised the minimum wage for workers at limited-service restaurant chains with at least 60 locations to $20 an hour in April.
Before this, the state's minimum wage of $16 an hour had applied to them, though many cities and counties within California had set higher minimums.
"I think what happened in California, I hope, is a unique situation," Kempczinski told CNBC. "It was a piece of very lopsided legislation that was targeting one industry."
McDonald's did not respond to Business Insider's request for further comment.
The fast-food industry lobbied intensively against the legislation, warning that the higher wages would force some restaurants to lay off workers. McDonald's was one of the companies opposing the bill , with Joe Erlinger, the president of McDonald's US, calling it "costly and job-destroying."
Some fast-food chains have laid off workers in California , including in some cases by closing restaurants, partly in response to the new legislation.
The $20 minimum wage was introduced to support workers in a state with a notoriously high cost of living . The fast-food industry, particularly, is characterized by low pay, long shifts, and irregular schedules.
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