In July, customers at some fast-food restaurants in Los Angeles were dismayed to find that they were being charged an extra 10 cents for paper bags at places like McDonald’s and Chick-fil-A. This increase in prices comes after the minimum wage at fast-food restaurants in California was raised to $20 per hour.
If you visit any McDonald’s fast-food restaurant in Los Angeles, you will be asked, “Would you like a paper bag?” On the self-order kiosk inside McDonald’s, there is also an option for “Add Bags” with a fee of 10 cents. Customers can choose between “0 bags” or “1-10 bags.” According to KABC News, customer Dr. KT Shakur said he was unaware of why he had to pay an additional 10 cents for a paper bag at McDonald’s in the Los Angeles area. He mentioned that McDonald’s is one of the oldest fast-food chains in history and a global brand, so the 10 cents per meal cost wouldn’t bring any losses to the company.
Chick-fil-A, which has five locations in Los Angeles, stated that each franchisee can decide whether to charge for bags based on Los Angeles city regulations.
The Los Angeles City Attorney’s Office stated in a release that the city’s ban on single-use bags enacted in 2013 was amended and took effect in July 2023, extending to restaurants beyond grocery stores. The regulation requires businesses to offer reusable bags to customers, and if they provide recyclable paper bags, a fee of 10 cents per bag can be charged.
In 2016, California voters approved Proposition 67 with 53.3% of the vote, banning single-use plastic bags in retail and grocery stores. Reusable bags can be charged at 10 cents each. Those in support of Proposition 67 believe it will reduce waste, protect oceans and wildlife, and lower cleanup costs. Single-use plastic bags are a common source of litter and have significant impacts on land, waterways, and marine life.
Opponents of the proposition argue that plastic bags are inexpensive and hygienic, can be used for multiple purposes by consumers, and are not strictly single-use. They believe charging for bags imposes unnecessary burdens on consumers and that reusable plastic bags are not as environmentally friendly.
Consumers in California have already felt that fast-food prices are too high, but fast-food businesses are also facing challenges. The Employment Policies Institute (EPI), based in Washington DC, conducted a survey of 182 fast-food companies in California. The news released on July 26 showed that less than a year after the minimum wage increase bill was passed in September last year, most restaurants have resorted to raising prices, reducing employee hours, or laying off staff. Many chain companies have stated they will scale back operations in California and focus on expanding outside the state.
Rebekah Paxton, the research director at EPI, stated, “Even before the $20 minimum wage took effect on April 1, fast-food restaurants made it clear that they were struggling to survive. Just a few months after its implementation, this policy has become a disaster, resulting in significant job losses and restaurant closures. Governor Newsom and state lawmakers should listen to small business owners and their employees rather than try to sugarcoat the truth.”
The survey revealed that due to the implementation of the minimum wage law, 98% of restaurants raised prices, 89% reduced employee work hours, 73% limited staff shifts or overtime opportunities, and 70% laid off employees or consolidated positions. Most restaurants anticipate further changes next year: 93% plan to raise prices, 87% plan to reduce work hours, 74% anticipate layoffs, and 71% plan to limit staff shifts or overtime opportunities.
67% of respondents stated that the minimum wage law will result in at least $100,000 in additional expenses per year for each restaurant; 25% said the increase would exceed $200,000. The survey also showed that 16% of restaurants are “unlikely” to expand within California, 73% are “highly unlikely” to expand in California, 38% may close, and 36% are “highly likely” to close.