Working-Class Californians Forced to Pay More For Fast Food In the Wake of the State’s Minimum Wage Hike

The Wall Street Journal highlights that a typical $16 meal at Chick-fil-A in Hollywood now costs $20, a substantial increase that reflects the broader impact of this legislation on food prices across the state.

The news sparked controversy at the time. Many were in favor of increasing the salaries of employees in one of the lowest-paying industries. Others were against the decision, arguing that it would inflate menu prices.

While it was aimed at ensuring fast-food workers can earn a living wage, it has led to an increase in the prices of food menu items, and its customers have been hit the hardest. 

This significant rise in prices is making even a simple fast-food meal a costly affair for regular customers, intensifying the financial strain on many households that already face high living costs in the state.

Local government actions, specifically those led by Governor Gavin Newsom and state lawmakers, are responsible for these changes.

9,500 jobs were lost in the fast food sector before January, a preemptive response to the expected rise in operational costs caused by the wage increase.

This selective application raises questions about the equitable treatment of businesses under state law.

A branch of the restaurant he co-founded advertised a busboy position at $16 per hour, below the $20 mandated wage.

This claim is intended to separate his legislative actions from his personal financial interests.

This creates a distorted economic landscape where businesses in other industries, like grocery stores that sell prepared food, face less financial strain from wage policies.

This could lead to staffing challenges in sectors that do not benefit from similar wage protections, altering the economic balance across various service industries.

The financial burden of these meals places additional stress on households struggling to manage their budgets in one of the country’s most expensive states.

Wendy’s saw the greatest increase, with an 8% hike. Whereas Chiptole’s prices had surged by around 7.5%.

“If I’m going to start paying restaurant prices, then I’m going to have to go somewhere else.”

“Since it took effect, job losses, reduced working hours, restaurant closures, and higher prices for California’s inflation-weary consumers have been ongoing,” the group said.

This migration could have long-term implications on the state’s demographic and economic landscape, possibly reducing its population and labor force.

The impact of wage laws on everyday expenses is becoming an increasingly significant issue, affecting the quality of life and economic stability of its residents.

Now, Newsom has signed a new law that would ban “junk fees” in California beginning in July. Ultimately, this prohibits any restaurant from implementing surcharges. 

However, as the new law prohibits this, they will be forced to increase their menu prices further. 

“So, now, do you take their rate down and do you go to an old-fashioned tip model and say to your servers, ‘You have to tip the whole house, but that drops everybody’s salaries’ or do you raise your prices 20%, 25%?” Thomas said.

“It might make a lot of customers happier. They might say, ‘We understand why prices went up.’ Let’s hope that happens. But I don’t know if our industry can hope that’s what happens. They’re still struggling. It’s been a tough year.”

“I see restaurants easily raising prices 5%, 15%. It’s going to be tricky,” she told the outlet. “We’re going to be seeing even higher prices based on this unfortunate interpretation. But not all is lost. … Things could change,” she said. 

According to a Reddit post published over six months ago, the user “bought a Subway Sandwich for 21 bucks,” a price that shocked many online. 

Nonetheless, the price showcases that fast food across the US is becoming worryingly expensive.