A fast food restaurant is not what it used to be.
A TikTok video of a customer complaining about the price of a $25 deal at a California McDonald’s has drawn blame for the state’s latest minimum wage increase for fast food workers.
Since taking effect April 1, the law requires chains with 60 or more restaurants nationwide to offer their workers a starting wage of $20 an hour, up from $16.
The viral video shows the frustrated customer at a Southern California drive-thru as she calls the price of the “40-piece chicken McNuggets package absurd.” The combo includes four containers of 10-piece nuggets and two large fries for $25.39 plus sales tax, which she calls “McFlation.”
“OK, so it’s $25.39 for 40 nuggets and two large fries,” the customer said in the video. “You couldn’t even add an average Sprite to it? Holy shit.”
Price was higher than SoCal average, McDonald’s says
The video’s comments section opened a forum for many people to blame California’s new law for soaring menu prices.
However, the price shown in the TikTok video is higher than the average cost of the 40-pack of Chicken McNuggets in Southern California stores, according to McDonald’s. Prices vary by restaurant and are at the discretion of local franchisees.
A report from Finance Buzz found that McDonald’s menu prices have doubled since 2014 for popular items more than any other chain analyzed, including Starbucks, Taco Bell and Wendy’s.
Between 2014 and 2024, the chains analyzed increased their prices by 60%, nearly double the national inflation rate, according to the report. McDonald’s has increased its average menu prices more than three times the national rate.
Fast Act paves the way for more regulations on fast food
Democratic Gov. Gavin Newsom signed Assembly Bill 1228 raising the minimum wage in September. The bill also created a board to develop rules and regulations for the fast food industry.
In a conference call in November, McDonald’s CEO Chris Kempczinski said the company would raise prices to offset wage increases, reduce restaurant costs and improve productivity.
“There will definitely be a short-term hit to franchisee cash flow in California,” Kempczinski said. “It’s hard to know exactly what that hit will be due to some mitigation efforts.” But there will be success.”
Kempczinski’s salary and bonuses totaled $19.2 million in 2023, Restaurant Business Magazine reported. Federal securities filings showed that was an 8% increase from 2022.
The company’s net income in the fourth quarter of 2023 was $2.04 billion, up from $1.9 billion a year earlier, according to a CNBC report.
Other chains such as Chipotle also announced menu price increases shortly after the California bill was signed.
Higher prices deserve support from low-income people, expert says
Even if minimum wage increases lead to higher costs of fast food products, the discussion should be about whether they benefit low-income people, according to Chris Tilly, a professor who studies labor markets, inequality and public policy at the University of California, Los Angeles.
“The big criticism of the minimum wage is that ultimately it kills jobs and hurts the people you’re trying to help,” he told USA TODAY on Thursday. “But the results over the last 30 years have shown that the minimum wage has been low enough that we haven’t seen these effects.”
He urged people to rethink their views and said that rising prices at chains like McDonald’s can economically hurt people at the lower end of the income scale, but that increases in the minimum wage won’t should not bear this burden.
He recommended addressing other core issues in the state, such as housing affordability and job market barriers.
“We need to think about how to help people,” he said. “But doing that while hurting other low-income people doesn’t seem like the right strategy to me.”
Contributor: Sara Chernikoff
This article originally appeared on USA TODAY: California minimum wage law blamed for $25 McDonald’s deal in video
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