A new report shows that since the $20 minimum wage law in California took effect on April 1, some fast-food chains have raised menu prices by approximately 8%.
According to the New York Post, a research company specializing in the food industry, Kalinowski Equity Research, reported that Wendy’s prices have increased by about 8%, while Chipotle Mexican Grill’s prices have risen by 7.5%.
The report also indicates that Taco Bell has raised menu prices by 3%, Burger King by 2%, and Starbucks, headquartered in Seattle, has increased prices at California locations by around 7%.
The study compared prices at 25 restaurants of each chain and analyzed specific menu items before and after the wage increase.
Between February 15 and April 2, Burger King raised prices by an average of 1.4% for the Whopper Meal and 2.1% for the BK Royal Crispy Chicken Meal across 25 stores, according to KER.
KER also looked into Chipotle’s price increases between February 7 and April 2, finding an 8.3% increase for their chicken wraps and 7% increase for steak wraps.
The report states that with around 500 restaurants operating in California, Chipotle’s median prices for their Chicken Burrito have gone up by 6.8% and 5.7%.
Despite McDonald’s executives warning of potential menu price hikes due to the wage increase, KER found that they have not implemented such changes yet.
Last year, California Democratic lawmakers passed Assembly Bill 1228, raising the minimum wage for fast-food workers from $16 to $20 per hour to help them cope with rising living costs.
Restaurants nationwide with fewer than 60 locations and those that list bread as a separate menu item for baking and selling are exempt from this law.
In addition to menu price increases, the law has also led to some job cuts in the industry.
Two large Pizza Hut locations in California laid off all in-house delivery drivers, totaling around 1,200 employees.
The new minimum wage law for fast-food workers in California has faced strong criticism from some individuals who argue that it will lead to layoffs and price hikes, ultimately harming the interests of restaurant workers, owners, and consumers.