Since April 1, when California’s minimum wage for fast food workers increased from $16 to $20 an hour, customers have seen prices climb—in some cases substantially.
A survey conducted by the Employment Policies Institute in June and July examined how raising the minimum wage has impacted 182 restaurant operators in the Golden State. It was conducted online and included limited-service restaurant operators and partner associations.
The survey found 67% of restaurant operators said the wage increase would cost their business at least $100,000 per location. About one in four said it would cost more than $200,000.
The vast majority of restaurant owners, 98%, said they had already raised menu prices. 89% said they had reduced work hours for employees, 73% said they had limited overtime or pick-up opportunities, and 70% had reduced staff or consolidated positions.
Additionally, 92% of survey respondents expressed concern that raising menu prices will lead to slower “foot traffic.”
The minimum wage boost also affected owners’ views of further expansion in California, with 89% saying they are less likely to add stores and 59% saying they are more likely to expand elsewhere.
Trade groups and some political pundits argue the wage hike has led to job losses and forced restaurants to close, while the Service Employees International Union and Governor Gavin Newsom’s office point to data showing the industry added thousands of jobs from April 1 through June.
While they celebrate the $20 minimum wage as a victory for hundreds of thousands of fast-food workers, SEIU leaders aren’t satisfied. The union is asking California’s newly formed Fast Food Council for a 70-cent raise effective Jan. 1, 2025.