California’s $20 minimum wage led to fast-food price hikes, lower customer traffic, study shows
CABIA President Tom Manzo joined ‘Fox & Friends’ to discuss how the minimum wage increase has impacted the fast-food industry as thousands are forced out of work.
California's new $20 minimum wage for fast-food workers has already caused a surge in restaurant prices and a decline in foot traffic since it went into effect April 1, data shows.
A recent study released by Placer.ai found that as a result of the new law which impacts restaurants with 60 or more locations — most quick-service chains have raised menu prices in the state by anywhere from the mid-single digits to mid-teens, percentage-wise, and the price hikes are hurting business.
California Gov. Gavin Newsom signs legislation raising the state's fast-food workers' minimum wage to $20 an hour at SEIU Local 721 in Los Angeles on Sept. 28, 2023. (Sarah Reingewirtz/MediaNews Group/Los Angeles Daily News via Getty Images / Getty Images)
The analysis found that during February and March of this year, foot traffic at major chain restaurants in California was actually up year-over-year and higher than the national average, but that abruptly shifted after the wage hike went into effect.
During April through May, foot traffic to fast-food restaurants in California was below the national average for seven out of eight weeks, Placer.ai said. The analytics firm said quick-service burger chains were the hardest hit.
BUSINESSES ‘FED UP’ WITH CALIFORNIA'S MINIMUM WAGE HIKE AS PRICES SOAR, THOUSANDS FORCED OUT OF WORK
McDonald's, for instance, saw roughly the same year-over-year foot traffic at its California locations as the rest of its restaurants nationwide during the February-March time frame. But after the minimum wage law went into effect, McDonald's California
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