Survey: 98 percent of California's fast food restaurants have raised prices after minimum wage hike

The law mandates a minimum wage of $20 per hour for fast food workers, with future increases based on Fast-Food Council recommendations.Photo byLouis HanselonUnsplash

A recent survey by the Economics Policy Institute, conducted in June and July 2024, highlights the financial strain on California's limited-service restaurant operators due to the new minimum wage law effective April 1, 2024.

The law mandates a minimum wage of $20 per hour for fast food workers, with future increases based on Fast-Food Council recommendations.

Key findings from the survey of 182 operators reveal that 67% expect the wage increase to cost at least $100,000 per location, with 26% predicting costs over $200,000.

In response, 98% of restaurants have already raised menu prices, 89% have reduced employee hours, and 70% have cut staff or consolidated positions.

Looking ahead, 93% plan further price hikes and 87% anticipate additional reductions in employee hours. The majority (75%) expect a decrease in employee numbers, and nearly all (99%) foresee significant price increases.

Additionally, 92% believe higher menu prices will reduce customer traffic, and 89% are less likely to expand within California.

The Institute is operated by a restaurant industry lobbyist who opposed minimum wage increases.