Can fast food chains win back price-conscious customers with special offers?
Deals like Taco Bell’s Discovery Box and Wendy’s $3 breakfast menu are coming to market at a time when inflation has been driving up fast food prices for years.
Don’t be surprised the next time you visit your favorite fast food restaurant and notice that the prices on the menu have gone up – if they haven’t already.
In April, the minimum wage for fast-food workers was raised to $20 an hour by law. In California, they are twice as likely to live in poverty as other workers, the Service Employees International Union said. According to Cal Matters, the union took part in fighting the pay increase for fast-food workers.
Meanwhile, restaurant industry leaders expressed concern that the bill would lead to layoffs and price increases, USA TODAY reported.
A recent survey by the Employment Policies Institute, a nonprofit research organization, examined the impact of wage increases on fast-food restaurants and found that these concerns are now a reality for some restaurants.
An online survey conducted by the nonprofit organization of 182 limited-service restaurants (fast food or quick-service restaurants) found that increasing menu prices was just one of several significant impacts of the minimum wage increase.
Here’s how some fast-food restaurants in California are responding to the $20 hourly wage and what customers can expect, according to the survey.
Do fast food restaurants demand more from me?
The Employment Policies Institute, which conducted the survey in June and July, found that 98% of respondents had already increased menu prices due to the $20 minimum wage.
This comes as prices at fast-food restaurants have risen 47% over the past decade, USA TODAY reported, even as numerous chains, including McDonald’s, Taco Bell and most recently Jimmy John’s, have introduced various discount menu items this summer.
What other impact does California’s minimum wage for fast-food workers have on the restaurant industry?
This doesn’t just affect customers at the drive-thru. The same people who get a pay rise may also have to expect a reduction in working hours.
The survey found that 89% of respondents had reduced their employees’ working hours. In addition:
- 73% of respondents had limited opportunities to take on a shift or overtime
- 70% staff reduction or consolidation of positions
The survey also asked respondents to share how the new minimum wage law would affect their restaurants next year. 60% responded it would lead to more automation or self-service technology.
What is the minimum wage in the state of California in 2024?
The minimum wage in California is $16 per hour, but some cities have a higher minimum wage.
How high is the national minimum wage?
The federal minimum wage is $7.25 per hour.
Paris Barraza is a trends reporter covering California for The Desert Sun. Reach her at [email protected]. Follow her on Twitter at @ParisBarraza.
