SAN DIEGO (FOX 5/KUSI) — After California’s minimum hourly wage for fast food workers increased from $16 to at least $20, customers may have noticed the prices for their favorite menu items at some restaurants have also gone up.
The new law mandating $20 hourly wages for California fast food workers went into effect April 1. Since then, many restaurants have raised their menu prices or reduced staff hours in response to the wage hike.
A survey conducted by the Employment Policies Institute in June and July looked at how raising the minimum wage for California’s fast food employees impacted 182 restaurant operators in the Golden State. The survey was conducted online via an email sent to a list of limited-service restaurant operators as well as partner associations with restaurant members.
According to the survey’s findings, 67% of restaurant operators said the wage increase would cost their business at least $100,000 per location. About one in four said it would cost more than $200,000 per location.
The minimum wage increase for fast food workers also affected owners’ thoughts about expansion, with 73% of respondents saying they are less likely to expand inside California and 59% saying they are more likely to look for growth opportunities outside of the state.
In late May, more than a dozen Rubio’s Coastal Grill locations across San Diego County closed, along with 35 other “underperforming” locations in California. The restaurant cited the “rising cost of doing business” as a deciding factor behind the closures.
The minimum wage increase is just one of several factors weighing down on the restaurant industry. Several restaurants across the country have closed due to inflation following the COVID-19 pandemic and major staffing shortages.