BACKGROUND
In September 2023, California Governor Gavin Newsom signed two union-backed bills that boosted fast-food and health care workers’ minimum wages.
- California-based fast-food workers for chains with 60 or more locations around the nation will earn at least $20 an hour beginning April 1, 2024, $4 higher than the overall state minimum wage of $16 that became effective January 1, 2024.
- In June 2024, health care workers will earn a minimum of $18, $21 or $23 an hour, depending on what type of facility employs them and where they work.
A lot of questions about the fast food minimum wage are addressed at the State of California Department of Industrial Relations website. Since TMF disallows posting this info, those interested have to goggle State of California Department of Industrial Relations minimum wages and fast-food minimum wage FAQ.
Here’s an early assessment by Cal Matters that addresses the effects of higher minimum wages and that the costs and potential consequences of the higher minimum wages worry some people, including economists and the governor, while others see upsides.
I’ll mention here that in November 2024, California voters will see a ballot initiative that proposes to raise the state minimum wage to $18 an hour.
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RECENT INCREASES IN CALIFORNIA FAST-FOOD MENU PRICES
While the minimum wage for California fast-food employees realized a substantial 25% increase from $16/hr to $20/hr, since April 1, 2024, fast-food menu prices at several places have realized the following increases, according to Kalinowski Equity Research:
- Wendy’s is leading the price hikes at 8%,
- Chipotle’s food prices have gone up 7.5%. Chipotle raised the price of its Chicken Burrito by 8.3% and the Steak Burrito by 7%
- As Starbucks’ food items are now 7% more expensive. Starbucks confirmed its price increase, saying it was largely due to the minimum wage increase in the state.
- Taco Bell raised menu prices by 3%.
- Burger King hiked prices by 2%. Burger King increased the price of its Whopper Meal by an average of 1.4%
Wendy’s, Chipotle’s, Taco Bell and Burger King did not respond to NBC Los Angeles’ request for comments and confirmation.
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Since In-N-Out offers a very simple menu, here’s my own research comparing menu prices on 02//02/2024 versus 04/12/2024 at their Covina, CA location where I’ve been a long time customer since the 1980s.
| IN-N-OUT COVINA, CA | 02/02/2024 | 04/12/0202 | Change | % Change |
|---|---|---|---|---|
| Double-Double | 5.65 | 5.90 | 0.25 | 4.4% |
| Cheeseburger | 3.95 | 4.10 | 0.15 | 3.8% |
| Hamburger | 3.50 | 3.60 | 0.10 | 2.9% |
| French Fries | 2.30 | 2.30 | 0.00 | 0.0% |
| Beverages | ||||
| • Small | 2.05 | 2.10 | 0.05 | 2.4% |
| • Medium | 2.20 | 2.25 | 0.05 | 2.3% |
| • Large | 2.40 | 2.45 | 0.05 | 2.1% |
| • X-Large | 2.60 | 2.65 | 0.05 | 1.9% |
| Shakes | 2.95 | 3.00 | 0.05 | 1.7% |
| Milk | 0.99 | 0.99 | 0.00 | 0.0% |
| Hot Cocoa | 2.20 | 2.25 | 0.05 | 2.3% |
| Coffee | 1.35 | 1.35 | 0.00 | 0.0% |
A double-double hamburger has two beef patties and two cheese slices with toppings requested by customers. My usual order is a double-double, hold the salt, animal style, with extra lettuce, extra tomato and grilled onion slice (not chopped) at no extra cost. Animal style is a burger of your choice with hand-leafed lettuce, tomato, a mustard cooked beef patty; add pickle, extra spread with grilled onions. Long time customers know about other variations that are not posted on the menu.
I should mention that In-N-Out uses only fresh beef patties (never frozen). In-N-Out states: Our commitment to quality starts with our hamburgers. And our burgers begin with our patties. Each patty is made using only fresh, individually inspected, whole chucks from premium cattle selected especially for In-N-Out Burger. Our team of Associates removes the bones, grinds the meat and then makes each patty. All of our ingredients are delivered fresh to our stores. In fact, we don’t even own a microwave or freezer.
Also, French fries are real potatoes.
On my February 2, 2024 visit at 8 pm, I immediately noticed a rather imposing figure, a security guard with a “don’t mess with me” look on a tall, husky muscular black male. My initial thought was this is not Oakland! So while waiting for my order, I struck up a conversation with the guard, asking him if this location had any serious trouble. He responded that In-N-Out has contracted his security guard company that rotates their guards at In-N-Out store locations in Southern California. He told me that bad people go anywhere. I mentioned that he had a don’t mess with me look, and he smilingly said that while it’s a deterrent, troublemakers especially teens nowadays have no respect and no fear of peace officers and security guards. When asked if this was a full-time job, he said no and that his full-time job was a construction worker, and after knocking off work at 3 or 4 pm, he worked part-time as a security guard. He said it was necessary given mortgage payments and the increased costs, feeding and supporting his family. After I told him to be safe, he walked outside along the long line of cars for drive-thru orders. He was reassuring customers that they were safe.
Over a year ago, in an OP here Goofyhoofy commented: The article notes that as “fast food” declines, “fast casual” is replacing it, citing Panera, Chipotle, and Moe’s as examples. (The last two are “fast food”, at least to me.)
Anyway, I was not aware of this macro “trend” in dining. All things must change, I guess.
Back then, I started a reply but had to tend to other pressing business. So I’ll finish my belated reply here now.
As “fast food” declines, In-N-Out is expanding its business in new markets, I.e., New Mexico and east of the Mississippi in Tennessee.
On January 10, 2023, Tennessee Gov. Bill Lee, Department of Economic and Community Development Commissioner Stuart McWhorter and In-N-Out Burger officials today announced the company’s plan to invest $125.5 million to establish an eastern territory office in Franklin, Tennessee, which represents In-N-Out’s first expansion east of Texas.
The project will create 277 new jobs in Williamson County.
Located off Interstate 65 in Franklin, In-N-Out will begin construction on its 100,000-square-foot office building by late 2024, with construction slated to be complete by 2026. The eastern territory office will house positions that support various business functions, from operations management to HR and IT. In-N-Out is recognized as a company that is committed to treating its associates like family.
In addition to the eastern territory office, In-N-Out plans to open future restaurants in the region, beginning with locations in and around Nashville by 2026. Currently, In-N-Out has 385 locations [update note: currently over 400] throughout California, Nevada, Arizona, Utah, Texas, Oregon and Colorado [update note: add Idaho]. The Tennessee restaurants will be In-N-Out’s first establishments east of Texas.
Gov. Bill Lee stated: ”I’m proud to welcome In-N-Out Burger, an iconic American brand, to the Volunteer State. Tennessee’s unmatched business climate, skilled workforce and central location make our state the ideal place for this family-run company to establish its first eastern United States hub."
Regarding wages in Tennessee, this website provides the following:
Minimum wage: $7.25 (the Tennessee minimum wage can change depending on certain employers. For example, those that make less than $500,000 per year, may pay a lower wage of $4.25 per hour to employees who regularly receive tips. Additionally, some cities and counties in Tennessee may have their own minimum wage Tennessee laws that are higher than the state and federal minimum wages)
Average wage: $19.98
Minimum wage in Nashville: $7.25
A recent 3/12/2024 article reports a bill to raise minimum wage in Tennessee to $20 an hour fails.
A bill that would’ve raised the minimum wage in Tennessee to $20 an hour has failed in the General Assembly.
On Tuesday, the bill, HB 2602, failed in the House’s Banking and Consumer Affairs Subcommittee and Senate Commerce and Labor Committee.
Finally, here’s a 5/31/2010 video, providing a rare look behind the scenes at In-N-Out when management allowed Huell Howser to showcase the company on his highly popular California Gold TV series on PBS KCET in Los Angeles.
https://blogs.chapman.edu/huell-howser-archives/2010/05/31/in-n-out-burger-californias-gold-146/
Today, this family-owned business is in good hands with Lynsi Snyder, the granddaughter of founders Harry and Ester Snyder, at the helm as owner and preaident. At age 41, Snyder became one of the youngest billionaires in the U.S. when she inherited full control of In-N-Out in 2017. Her net worth is $6.7 billion (rank 409) as of February 2024, according to Forbes.
Regards,
Ray