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California fast-food restaurants forced to close over minimum wage hike: 'Business owners are fed up'
CABIA President Tom Manzo joined 'FOX & Friends' to discuss how the minimum wage increase has impacted the fast-food industry as thousands are forced out of work.
In-N-Out Burger customers are paying more for their Double-Doubles and shakes after California's new minimum wage law went into effect.
The California-based burger chain told local news station KTVU that it has raised menu prices across the Golden State. The price increases reportedly took effect on the same day California bumped up its minimum wage.
"On April 1st, we raised our prices incrementally to accompany a pay raise for all of the Associates working in our California restaurants. The price increase was also necessary to maintain our quality standards," In-N-Out told KTVU in a statement.
FOX Business reached out to In-N-Out for comment.
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In-N-Out Burger at Safe Kids Day 2017 at Smashbox Studios in Culver City, California, on April 23, 2017. (Tommaso Boddi/Getty Images for Safe Kids Worldwide)
Starting wages at In-N-Out in California range from $22 to $23 per hour, based on location, which is slightly higher than the mandated minimum wage, according to KTVU.
Under the law, the minimum wage rose from $16 to $20 an hour for restaurants that have at least 60 locations nationwide, except those that make and sell their own bread. This equates to an annual salary of $41,600.
Gov. Gavin Newsom signed the legislation, AB 1228, into law in September, saying at the time that "California is home to more than 500,000 fast-food workers who — for decades — have been fighting for higher wages and better working conditions." It went into effect on April 1.
He said the state is "one step closer to fairer wages, safer and healthier working conditions, and better training by giving hardworking fast-food workers a stronger voice and seat at the table."
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In-N-Out Burger located on Rte. 66 in Azusa, California. (Robert Gauthier/Los Angeles Times via Getty Images)
Customers who spoke to KTVU said they understand why prices went up, but weren't exactly happy about it.
"The price increase? I understand because the economy's kind of bad. Food's going up, all type of stuff," said Pittsburg, California, resident Chris Hachlica, who patrons In-N-Out every other week.
Hachlica told KTVU the prices are all relative.
Ordering a Double-Double meal in San Francisco might cost $13.36, which is the most expensive in the Bay Area. The same order in Alameda costs a little less than $12, according to KTVU.
But that's still a far cry from 2021 prices, when a Double-Double meal in Pleasant Hill cost $9.
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A menu is displayed in the drive-thru at an In-n-Out restaurant in Pleasant Hill, California, on Oct. 28, 2021. The menu shows the cost of a Double-Double meal was $9, compared to $12 or $13 in the Bay Area in 2024. (Justin Sullivan/Getty Images / Getty Images)
In-N-Out President Lynsi Snyder said last month that she fought to keep costs down in California as the state increased the minimum wage.
"I was sitting in VP meetings going toe-to-toe saying, ‘We can’t raise the prices that much, we can’t,'" In-N-Out President Lynsi Snyder said in a Wednesday interview with "Today," adding that she felt "an obligation to look out for our customer."
Stubborn inflation is compounding with the minimum wage hikes to put California businesses and customers in a pinch. The Labor Department will release fresh inflation data Wednesday morning, which economists expect will show that prices rose 3.4% in May — unchanged from the previous month.
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A Double-Double burger and french fries are arranged for a photograph at an In-N-Out Burger restaurant in Costa Mesa, California. (Patrick T. Fallon/Bloomberg via Getty Images / Getty Images)
On a monthly basis, inflation is seen rising 0.1%, down from the 0.3% figure recorded in April.
"Especially coming from Georgia, California prices are a little bit higher," said Khalil Coleman, who told KTVU he moved to Oakland two weeks ago. "But when I came to In-N-Out and I was spending $20 on a meal, it's definitely something that I did not expect at all."
Coleman said he purchased two meals on Tuesday afternoon.
Hachlica told KTVU he's made his peace with higher prices.
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"It's not bad, it's what it is. As long as they don't go over $20, I'm fine with it," he said.
Federal Reserve officials will announce a decision on interest rates Wednesday afternoon. Economists expect the Fed to hold rates steady between 5.25% to 5.5%, in an effort to lower inflation to the target 2% increase.
Policymakers raised interest rates sharply in 2022 and 2023 to the highest level since the 1980s in a bid to
slow the economyand cool inflation. Fed officials are now grappling with when they should take their foot off the brake. They remain unlikely to do so while inflation remains persistent.
"It's not just the price of eggs, it's bread, it's cheese, it's milk, ‘cause I have a 1-year-old child, that we need to buy, so the prices in general are definitely a lot higher and it’s noticeable," Coleman said.
FOX Business' Daniella Genovese and Megan Henney contributed to this report.
