Of those nearly 4,000 locations, 477 can be found in the state of California. Golden State residents have always loved the Tex-Mex fair at an affordable price point. But now, those prices may be increasing significantly after Gov. Newsom increased the minimum wage for all California fast food workers.

Just over six months later, the legislation was officially implemented, and as of April 1, 2024, all fast food employees in the state of California were paid $20 per hour instead of the $16 they earned before.

For employees at fast food chains, getting paid 25% more sounds fantastic and, of course, horrific to the corporations that have to pay them. But outside of that immediate reality, it’s also likely that prices in California’s fast food restaurants will increase, some might close, and others could let go of hundreds of employees.

Chipotle is just the latest in a long line of corporations to speak out against the bill. Jack Hartung, Chipotle’s chief financial and administrative officer, explained to his investors on an earnings call at the end of March 2024 that they will soon be making big changes at their California locations.

Hartung didn’t offer specific numbers regarding the price increase. Instead, he said, “We haven’t made a final decision, in terms of pricing. We’ll wait and see just what the landscape looks like, what the consumer sentiment is, what other companies are going to do.”

In October 2023, just after the bill passed, McDonald’s CEO Chris Kempczinski told the press that McDonald’s will also need to increase its prices in California in 2024 to offset the significantly increased cost of labor.

In 2023, Chipotle spent a whopping $2.44 billion on labor, which was already 11% more than in 2022. Now, with the new minimum wage for the workers at the nearly 500 California restaurants up another 25%, their labor costs will increase by hundreds of millions of dollars in 2024.

While prices at fast food restaurants have been climbing steadily for years, these companies are still doing their best to keep prices as low as possible as they do not want to alienate their entire customer base.

Consequently, many low-income Americans have already reduced or even eliminated fast food restaurants from their diets. And there is no doubt that the giant corporations will feel this loss over the next few years.

Although no fast food chains have announced that layoffs are in the near future, it’s extremely likely that they will do so soon. Once they create a new annual budget with the increased minimum wage and price tags, other big changes will be on the way.

In 2023 Chipotle told the press that it was testing robots to replace its human employees and make their beloved guacamole and even build the company’s popular bowls for customers.

For now, it seems that residents, workers, and companies within the state will have to wait and see what unfolds next. If prices continue to increase in California, the state will almost certainly struggle to keep its businesses and residents from moving to other, more affordable states.