In a recent interview with reporters, Kerri Harper-Howie, a McDonald’s franchisee based in Los Angeles, shed light on the potential impact of California’s new $20 minimum wage on the fast-food industry. Harper-Howie, who co-owns 21 McDonald’s restaurants in the state with her sister, expressed concerns about the feasibility of offsetting the wage increase through price adjustments alone.
Harper-Howie emphasized that while raising menu prices could help mitigate the impact of the wage hike, it would not be a sustainable solution. “You can’t raise prices enough,” she remarked, suggesting that such a move would render McDonald’s offerings unaffordable for many consumers.
Acknowledging the impending legislation, Harper-Howie revealed that her franchise would inevitably experience a reduction in profitability. Despite exploring avenues for cost savings and operational efficiency, she stressed the inevitability of absorbing the financial strain caused by the wage hike. “There are cost savings that we can do behind the scenes, and other ways to be more efficient … but this means less profitability for us, and we will absorb that,” she explained.
Effective April 1, California’s minimum wage for fast-food workers will increase to $20 per hour, marking a significant jump from the current rate. This adjustment, representing a 25% increase, poses challenges for businesses across the state. Moreover, the establishment of a Fast Food Council with the authority to further raise wages adds an additional layer of complexity to the situation.
Harper-Howie’s insights offer valuable perspective on the multifaceted implications of the minimum wage hike for McDonald’s franchisees and the broader fast-food industry in California. As businesses navigate these changes, finding a balance between maintaining affordability for consumers and ensuring fair wages for workers remains a pressing concern.