Can fast food chains win back price-sensitive customers with deals?
Deals such as Taco Bell’s Discovery Box and Wendy’s $3 breakfast combo are arriving as inflation continues to jack up fast food prices over the years.
Don’t be surprised the next time you visit your favorite fast food restaurant and see that the prices on the menu have increased – if they haven’t already.
In April, California law raised the minimum wage for fast food employees to $20 an hour, a state where they are “more than twice as likely to live in poverty than other workers,” said the Service Employees International Union. The union helped fight for the pay increase for fast food workers, according to Cal Matters.
Meanwhile, restaurant industry leaders expressed concerns that the law would lead to job cuts and price increases, USA TODAY reported.
A recent survey from the Employment Policies Institute, a nonprofit research organization, evaluated the impact of the wage increase for fast food restaurants and found that those concerns are now a reality for some restaurants.
The nonprofit’s online survey of 182 limited-service restaurants (fast food or quick-service restaurants) found that a raise in the menu prices was just one significant effect of the minimum wage increase.
Here’s what some fast food restaurants in California are doing in response to the $20 an hour rate, and what customers can expect, according to the survey.
Are fast food restaurants charging me more?
Employment Policies Institute, which conducted the survey in June and July, found that 98% of respondents had already raised menu prices due to the $20 minimum wage.
This comes as prices at fast food restaurants have increased by 47% in the past decade, USA TODAY reported, though numerous chains, including McDonald’s, Taco Bell and most recently, Jimmy John’s, have introduced various value meal deals this summer.
What other ways does the California minimum wage for fast food employees affect restaurants?
It’s not just customers at the drive-thru being affected. The same people seeing an increase in wages may also experience a decrease in hours.
The survey found that 89% of respondents had reduced employee hours. In addition:
73% of respondents had limited opportunities to pick up a shift or overtime70% reduced staff or consolidated positions
The survey also asked respondents to share how the new minimum wage law would affect their restaurants in the next year, and 60% said it would increase automation or self-service technology.
What is the California state minimum wage 2024?
The minimum wage in California is $16 an hour, though some cities have a higher minimum wage.
What is the federal minimum wage?
The federal minimum wage is $7.25 an hour.
Paris Barraza is a trending reporter covering California news at The Desert Sun. Reach her at pbarraza@gannett.com. Follow her on Twitter @ParisBarraza.
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Publish date : 2024-08-12 08:55:00
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