Some fast food restaurant chains have raised menu prices by as much as 8% since California’s $20 an hour minimum wage law took effect April 1, according to a new report.
Wendy’s has hiked prices by roughly 8% while Chipotle has raised prices by 7.5%, according to data from Kalinowski Equity Research and cited in The New York Post.
Taco Bell raised menu prices by 3% and Burger King hiked prices by 2%, the report found.
Seattle-based Starbucks increased prices by about 7% in California.
Kalinowski Equity Research compared prices at 25 restaurants for each chain and also did a side-by-side comparison of specific menu items before and after the wage hike.
Chipotle raised the price of its Chicken Burrito by 8.3% and the Steak Burrito by 7%, while Burger King increased the price of its Whopper Meal by an average of 1.4%, according to KER.
Even though McDonald’s executives had warned that it, too, would increase menu prices because of the wage increase, KER found that it has not done so yet.
Democrats in the California State Legislature passed Assembly Bill 1228 last year, increasing the minimum wage for quick-service restaurant workers from $16 to $20 an hour to help them cope with the rising cost of living. The law was also seen as an acknowledgment that many of the more than 500,000 Californians who work in fast food are not teenagers earning some spending money but adults working to support their families.
Restaurants with fewer than 60 locations nationwide are exempt, along with restaurants that bake and sell bread as a standalone menu item.
In addition to higher menu prices, the law has also led to some job cuts in the industry.
Two large Pizza Hut operators in California laid off all in-house delivery drivers, totaling about 1,200 employees, according to federal employment notices.
The Associated Press contributed to this report.
