The new year looks bleak for 1,200 Pizza Hut delivery drivers in California, thanks to a new statewide minimum wage law that goes into effect April 1. The pizza chain can no longer afford to keep delivery service since fast-food workers will now make $20 an hour instead of $16. This legislation may only directly affect large fast-food chains with 60 or more locations nationwide. Still, its repercussions will be felt throughout the industry and beyond.
Companies rarely absorb those costs; they can’t. Workers and consumers take the hit. On top of layoffs, California customers should expect to pay more at the drive-through window.
Chipotle and McDonald’s have suggested they will raise menu prices. Chipotle’s CEO said, “We are definitely going to pass this on. We just haven’t made a final decision as to what level yet.”
It is as if consumers haven’t seen price increases at their favorite fast-food joints since the pandemic. Anyone who frequents these establishments has noticed their “value meal” costs them more. A lot more.
McDonald’s says it raised prices 10 percent in 2022 and another 10 percent in 2023. Chipotle increased prices five times in two years. Chick-fil-A and Wendy’s reportedly suffered the most significant price hikes over the last few years, with the latter’s menu prices spiking nearly 35 percent.
Videos have gone viral demonstrating some expensive meals bought at various locations. In spring 2023, one TikToker’s video highlighting McDonald’s combo meals went viral. A Big Mac meal was an astounding $16.89. Customers are not happy.
Read the full Inside Sources article here.
Kristen Walker is a policy analyst for the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit www.theamericanconsumer.org or follow us on Twitter @ConsumerPal