Proponents of California’s AB 1228, which passed in September 2023 to raise the minimum wage for the fast food industry to $20 per hour, have repeatedly claimed the law has been “benign,” or even good (a “win-win-win”) for the state.
Federal data shows the opposite. In addition to the thousands of job losses surrounding the implementation of the law, new data shows menu prices have also skyrocketed.
Datassential, a food and beverage intelligence firm, collected menu price data for fast food restaurant chains that have locations across the country. The data is bleak for California: menu prices rose by almost double (13.1%) the rate of all other states (7.2%) since the $20 minimum wage was passed.
Here’s some of the findings according to Datassential:
California has faced the highest inflation of any state since the legislation was announced in September 2023, with a significant spike in April 2024 when it took effect.
In April 2024, 34.6% of menu items at limited-service restaurants in California saw price increases — about 5 times the rate of other states.
These results are not shocking: an EPI survey of California operators in July 2024 found 98% had already been forced to raise prices to brace for the impact of the $20 minimum wage, in addition to others who had to downsize operations, reduce staffing levels, or even shut down. This new data is just more evidence that California's wage hike is killing the state's fast food restaurant industry.