Nearly every fast-food restaurant in California raised prices due to minimum wage law, survey finds

After California began enforcing a $20 minimum wage for fast food workers, a survey of restaurant owners revealed that most had to raise prices, reduce employee hours and cut staff in response to the new law.

The new law generally applies to workers of drive-thru and fast-casual restaurants.

According to a new survey released by the Employment Policies Institute, 98% of affected restaurants raised menu prices, 89% cut employee hours, 73% limited overtime or added shifts and 70% reduced staff or consolidated positions.

As nearly all of the restaurants surveyed said they expect to continue raising menu prices, 3 in 4 restaurants anticipate significantly increasing prices because of the law.

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The survey also revealed that 4 in 10 restaurants increased automation. Also, 1 in 10 restaurant operators said they had to close at least one of their locations.

The restaurant industry was by and large opposed to increasing the state's minimum wage. Restaurants successfully lobbied the state to rescind a law that would have made the worker minimum wage $22 per hour.

When lawmakers passed the bill in 2023, the state's minimum wage was $15.50 an hour.

As of May 2023, California had 427,270 fast food workers, according to the Bureau of Labor Statistics, with an average pay of $ 17.63 per hour. The nationwide average wage for fast food workers in 2023 was $14.48 an hour.

Despite opposition from the industry, lawmakers moved forward with the increased minimum wage as workers said the average wage of $36,670 per year was simply not enough to live off of. In 2023, the average wage of a quick-service worker was $29,000 below the average salary in the U.S.