98% of California Fast-Food Restaurants Raised Prices With Minimum Wage Hike: Survey

California fast-food restaurants have passed the proverbial buck onto consumers. According to a recent survey, 98% of all the state’s fast-food joints have raised their prices in response to the state’s new $20/hour minimum wage law. Unsurprisingly, however, the CEOs of said restaurants did not take a cut in their salaries. Let’s take a look at the numerical breakdown.

California Fast-Food Restaurants Passed the Buck

In June, In-N-Out became the first of the California fast-food restaurants to raise their prices in response to the minimum wage hike. “On April 1st, we raised our prices incrementally to accompany a pay raise for all of the Associates working in our California restaurants. The price increase was also necessary to maintain our quality standards,” the company said in a statement to KTVU at the time.

The Employment Policies Institute polled 182 restaurant owners in the Golden State in June and July to find out how they have been affected by the minimum wage increase. Operators of limited-service restaurants and partner associations participated in the online survey.

Run by a lobbyist for the restaurant sector who has opposed raising the minimum wage, the EPI is a nonprofit think tank.

According to the poll, 67% of restaurant owners claimed that the wage hike will result in at least $100,000 in losses for each site, while 26% of respondents estimated the price to be over $200,000.

Additionally, 98% of restaurant proprietors claimed to have increased menu prices already. Roughly 89% of employers reported reducing employee work hours, 73% said there were fewer chances for overtime or pick-up work, and 70% said they had cut personnel or combined roles.

The increase in the minimum wage also had an impact on the owners’ perceptions of future growth in California — 89% of them stated they would be less inclined to open new locations in the state, while 59% said they would be more inclined to expand outside of California.

Interestingly (or perhaps not), the CEOs of California fast-food restaurants are still enjoying a handsome salary. According to Investor’s Business Daily, the average fast-food restaurant CEO made an average of $6,617 an hour in 2019, which is more than 500 times what the average workers in fast-food restaurants made at the time.

First Passed in April 2024

This year’s minimum wage increase took effect in April. $20 per hour is the pay rate for workers at California fast-food restaurants with more than 60 locations nationwide. The state’s general minimum wage of $16 per hour is exceeded by this rise.

This wage raise follows the enactment of a bill in September. The bill was supported by Governor Gavin Newsom, who emphasized the need for better pay and working conditions for the state’s more than 500,000 fast-food employees. The bill also created the nine-member Fast Food Council, whose duties included regulating future pay raises and establishing guidelines for working conditions through 2029.

Despite raising prices at its California locations, In-N-Out heiress Lynsi Snyder insisted that hers was going to be one of the California fast-food restaurants that was committed to “cost control” despite the minimum wage hike.

Snyder, who took over the burger company when her father passed away and has led it through many difficulties in the last 14 years, stressed her commitment to maintaining affordable prices for patrons. In internal meetings, she recapped her attempts to thwart significant price increases, emphasizing her dedication to keeping prices reasonable and citing her sense of duty to protect customers.

The impacted employees will receive an annual compensation of $41,600 as a result of this modification.