- The effects of California’s $20 minimum wage for fast food workers are beginning to be felt.
- Chipotle said the law increased wages at its restaurants by about 20%.
- This resulted in a 7% increase in menu prices at Chipotle locations in California.
California’s $20 wage for fast food workers has only been around for a few weeks, and its effects on workers and customers are starting to be felt.
At Chipotle, the law led to a 20% increase in wages for restaurant workers in the Golden State, the company announced during its earnings conference call Wednesday.
To offset that cost, menu prices have increased about 6 to 7 percent for California customers, CEO Brian Niccol said.
Chief Financial Officer Jack Hartung added that the average price in California before the increase was not that different from other states, even though the cost of doing business there is generally higher than in other parts of the United States. .
Chipotle is based in California and has 475 restaurants there, which is about one-eighth of the company’s total.
“After the increase, we still have reasonably priced burritos,” Hartung said. “This chicken burrito is going to cost about $10.”
However, he added that it was a little early to see the real effect on customer behavior.
And, of course, Chipotle isn’t the only restaurant chain trying to figure out the math to make the new rule work.
Hartung said the company passes the cost on to consumers less than its competitors.
“We still think we offer great value here,” he said. “As the consumer discovers how they want to balance their budget, we believe Chipotle will stay within their budget.”
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