California Minimum Wage Increase to $20/hr Forces Fast Food Chains to Raise Prices

California minimum wage increased from $16 to $20 per hour, effective April 1, forcing fast food chains like Chipotle, McDonald's, and Starbucks to raise prices.

With a 25% minimum wage increase, businesses must adjust pricing, streamline workforce, or cut employee hours to manage higher costs.

McDonald's CEO said "there’s going to be some element" of minimum wage hikes that necessitate price increases. Fast food prices have already doubled over the past decade.

Companies are exploring using robotics and AI to streamline operations and reduce reliance on labor to deal with rising wages. For example, Chipotle is testing robot-made guacamole.

Wage hikes add to existing inflationary pressures that have already made fast food less affordable. Consumers face higher everyday costs for essentials.