Fast food giants McDonald’s and Chipotle are facing another round of price increases in California following the recent approval of a wage hike for fast-food workers by Governor Gavin Newsom.
Key Takeaway
McDonald’s and Chipotle are raising menu prices in California after Governor Gavin Newsom approved a wage increase for fast-food workers. The new law, set to start in April, raises the minimum wage from
6.21 to $20 an hour. These price increases may potentially impact other food establishments in the state.
McDonald’s Announces Price Increase
McDonald’s CEO Chris Kempczinski revealed on Monday that the company will be raising prices in California, although the exact amount of the increase has not been specified.
Chipotle Follows Suit
Last week, Chipotle’s CFO Jack Hartung also announced during a company earnings call that the Mexican fast-food chain is likely to implement price hikes in response to the wage increase.
A Response to Minimum Wage Increase
While price increases for popular fast food items are not uncommon, the recent changes are a direct result of Governor Newsom signing legislation in September. The new law raises the minimum wage for fast-food workers from $16.21 to $20 an hour.
Governor Newsom’s decision was influenced by the fight for better wages and improved working conditions from over 500,000 fast-food workers in California.
Impact on Other Food Establishments
The upcoming price increases from McDonald’s and Chipotle may set a precedent for other food establishments in the state. As the new law goes into effect in April, it is possible that other popular dining spots may follow suit in order to cope with rising wages.
