Price of McDonald's, $MCD, Big Macs could cost $15 thanks to minimum wage hikes, per NYP.
Brandon Arnold, the executive vice president of the fiscally conservative National Taxpayers Union, raised concerns about California's decision to enforce a $20-per-hour minimum wage for fast-food employees. Speaking to Fox News, Arnold emphasized that companies might face the dilemma of either increasing prices, cutting labor costs, or adopting a combination of both. He argued that such measures are unfair to employees facing layoffs and customers experiencing significant price hikes for products like a Big Mac.
Price of McDonald's, $MCD, Big Macs could cost $15 thanks to minimum wage hikes
1/12/2024
In July, a McDonald's in Connecticut faced criticism for charging $18 for a Big Mac combo meal. Arnold predicted potential job reductions of 10-15% in the fast-food industry as employers grapple with rising labor costs. He highlighted the impact on workers, stating that they would prefer earning $8, $9, or $10 per hour rather than facing unemployment.
California's $20-an-hour minimum wage for fast-food workers is scheduled to take effect in April, prompting McDonald's and Chipotle to announce price increases at their California locations. Last week, Pizza Hut announced layoffs of over 1,200 delivery drivers in California ahead of the new wage law. Arnold emphasized that while job cuts might not happen immediately, companies could be forced to make changes when faced with challenging economic conditions.
In January, Joe Erlinger, the president of McDonald's USA, warned that California's minimum wage hike would make it nearly impossible to operate small business restaurants. Arnold's concerns align with the broader trend of minimum wage increases, affecting 25 states and Washington, DC, with the laws going into effect on Monday in 22 of those states. Minimum wage hikes in other states, including Florida and parts of Oregon and Nevada, will be implemented later in the year. In New York City, Long Island, and Westchester County, the minimum wage increased from $15 to $16, while the rest of New York State saw an increase from $14.20 to $15.
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