A new report by the Employment Policies Institute highlighted the impacts of California’s $20 minimum wage which has caused 98% of operators to raise prices while 89% reduced worker hours.
The 15-page report highlighted survey results of 182 limited-service restaurant operators in California which was conducted in June and July 2024.
Here is the abstract:
A Survey of Fast Food Employers’ Responses to California’s $20 Minimum Wage
Effective April 1, 2024, many limited-service restaurant operators (also referred to as “fast food” or “quick-service” restaurants) in California are required to pay employees a minimum wage of at least $20 per hour. The law that increased this limit also allows for future increases to the quick service minimum wage based on recommendations of a Fast-Food Council. While those subject to the law may be affected, other limited-service operators may also experience effects, such as being forced to raise wages as high as the new law to match their competitors.
To better understand the impact of increasing the minimum wage for California’s limited-service restaurant employees, a survey of 182 limited-service restaurant operators in California was conducted in June and July 2024. Key Findings: As a result of the new fast food minimum wage law,
- A majority of respondents (67%) say it will cost their restaurant at least $100,000 per location. One in four (26%) say it will cost more than $200,000 per location.
- A majority of restaurants say they have already raised menu prices (98%), reduced employee hours (89%), have limited employee shift pick-up or overtime opportunities (73%) and reduced staff or consolidated positions (70%).
- A majority of restaurants say in the next year they will have to raise menu prices (93%), reduce employee hours (87%), reduce staff or consolidate positions (74%), and limit employee shift pick-up or overtime opportunities (71%).
- Many (75%) say the number of employees will decrease (somewhat decrease, 50%; significantly decrease, 25%).
- Nearly all (99%) say prices will increase with 73 percent saying they will “significantly increase.”
- Ninety-two percent of owners think that raising menu prices will adversely affect customer foot traffic (somewhat decrease, 34%; significantly decrease, 58%).
- Eighty-nine percent of owners say they are less likely to expand inside California (somewhat less likely, 16%; significantly less likely, 73%).
- Many (59%) say they are more likely to expand outside of California (somewhat more likely, 13%; significantly more likely, 46%).
- A majority (74%) say there is an increase in the likelihood of shutting their restaurants down (somewhat increase, 38%; significantly increase, 36%).
Related Stories:
- June 6, 2024 – Group Says 10,000 Fast Food Jobs Lost After $20 Minimum Wage Law
- Sept. 28, 2023 – California Increases Minimum Wage to $20 Per Hour for Fast Food Workers
7 comments
This is what happens when you have government involvement where it doesn’t belong. Each restaurant has a price point. So when you walk into a fast food restaurant and have to use a kiosk with no employee help you better get use to it.
Using a kiosk is no big deal. Happy to do it if the employees are getting the raise.
Romy, you really don’t get it, do you. The kiosk you are using took the place of an employee. If one person gets paid as much as two people should, then one gets fired. The money to pay them doesn’t come out of thin air.
Yes, the REMAINING employees are “getting the raise” but there will be fewer employees due to restaurant closures and increased automation. The concept of setting differing minimum wage rates by industry or occupation is fundamentally unsound.
SOME employees are getting a raise. Others are being fired. Make no mistake…kiosks are there to replace the human worker because they are cheaper for the business. You’re happy to use them but the people who used to have those jobs aren’t happy collecting bare minimum on unemployment.
The problem is the people that were in those jobs taking orders always messed up, at least and the kiosks and mobile ordering i make sure to get exactly what i want on the order. Yes they still mess up my order on pickup but its one less step for humans to mess up.
The Kiosk replaced the employee!!!
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