Results from a new survey reveal that the vast majority of restaurants in California have raised menu prices and reduced employee hours after the state’s new $20 per hour minimum wage law took effect in April.
The survey was conducted by the Employment Policies Institute and interviewed 182 restaurant operators throughout the Golden State in June and July.
The big picture: Two-thirds of respondents said the new law will cost their restaurants at least $100,000 per location, with a quarter saying it will cost over $200,000 per location.
- The survey shows that 98 percent of restaurants have already raised menu prices, 89 percent have reduced employee hours and 73 percent have limited employee shift pick-up or overtime opportunities.
- There have also been 70 percent of restaurants which have reduced staff or consolidated positions.
What we’re watching: Looking ahead, 93 percent of restaurants said they will have to raise menu prices in the next year, 87 percent said they will reduce employee hours, 74 percent said they will reduce staff or consolidate positions and 71 percent said they will limit employee shift pick-up or overtime opportunities.
- Three-quarters of respondents said the number of employees will decrease within the next year, while 99 percent said prices will increase – including 73 percent that said prices will significantly increase.
- Eighty-nine percent of restaurant owners also said they are less likely to expand inside California because of the new law, while a majority of them (59 percent) said they are more likely to expand outside of the state.
- Three-quarters of respondents said there is an increase in the likelihood of shutting down their restaurants.
