Cooking up higher fast-food wages

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Last month, 625 local restaurant owners urged California’s Fast Food Council not to hike the minimum wage for fast-food workers from $20 to $20.70 – stating “[they] simply cannot survive another wage increase.”

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But, they can.

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While restaurant owners have warned they’ll be forced to fire workers, studies overwhelmingly indicate that, in the end, California’s fast-food workers will be better off. A study of 172 minimum-wage increases from 1979 to 2019 found little evidence of jobs lost despite apparent increases in overall pay.

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Instead of firing workers, fast-food chains typically respond by increasing prices, which many have already done. This is actually pretty cheap—increasing employee wages by 10% has been shown to result in a 0.4% increase in menu prices at most.

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Unfortunately, some restaurants have had to close since the $20 California fast-food minimum wage went into effect. However, these restaurants were often already underperforming before the wage hikes.

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Despite the sheepish cries for help from fast-food chains, the minimum wage increases look promising by all accounts.