n-N-Out Burger, the most recognizable California fast-food chain, has raised its menu prices because of a new minimum-wage law in California.
Last year, Gov. Gavin Newsom (D) signed a law increasing the state-mandated minimum wage at fast-food restaurants from $16 per hour to $20 per hour. The law took effect on April 1.
Democrats who supported the law said it was necessary to provide workers with a living wage. But there are consequences of forcing restaurants to raise their minimum wages by 25% because employers rarely absorb the cost of increased wages.
Typically, they pass the cost onto the consumer or their employees (in the form of layoffs). And almost immediately after Newsom signed the law, some employers announced layoffs. Other fast-food chains raised their prices or said they would increase automation.
