California’s Wage War: Examining the Domino Effect on Fast-Food Menu Prices

Following California’s substantial raise in minimum wage for fast-food workers, the Golden State witnessed a noteworthy surge in fast-food prices, climbing by a minimum of 7% within a mere six-month span.

In tandem with the ongoing wave of worker layoffs, California secured the top spot for menu price inflation across the nation leading up to April 1st, subsequent to Governor Gavin Newsom (D-Calif.) signing off on the bill to escalate the minimum wage from $16 to $20.

Despite the apprehensions surrounding these price escalations, authorities contend that the upticks aren’t markedly steeper than those observed in the states ranking second and third, namely Washington (6.1%) and Kentucky (6%).

Additionally, consumers nationwide experienced a 4.5% surge in fast-food prices over the same half-year period.

A comprehensive study revealed that California’s 30 area codes featured prominently in the top 30% of areas witnessing the most substantial price hikes across fast-food menus. Moreover, out of 288 U.S. area codes, California’s cities claimed four spots among the top 10 for price escalations.

Leading the pack was the 530 area code encompassing Northern California, registering the highest net menu price inflation among fast-food establishments nationwide, standing at 8.9%.

According to Datassential, full-service restaurants, which encompass sit-down dining establishments, nationally raised their menu prices by 2.4% during the identical six-month duration.

In California under Newsom’s governance, prices surged by 3.3%, ranking third highest following Hawaii and Washington State.

As per Kalinowski Equity Research, Wendy’s spearheaded the price surges at 8%, trailed by Chipotle at 7.5%, Starbucks’ culinary offerings at 7%, Taco Bell at 3%, and Burger King at the bottom with the least increment at 2%.

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