A Mexican restaurant in San Diego, California has recently announced its permanent closure, adding to the growing list of businesses in the state that have faced challenges since the minimum wage was increased to $20. This wage hike has also impacted major chains like McDonald's, Subway, and Burger King, leading to the closure of several locations and financial struggles for many businesses.
The sudden and significant 25% increase in the minimum wage has put a strain on the bottom lines of restaurants, resulting in job losses for thousands of fast food workers. As a result, many establishments have been forced to raise their prices in order to stay afloat financially.
A survey conducted by LendingTree revealed that 78% of respondents now view fast food as a luxury due to its perceived high cost. The rising prices of fast food items, once considered affordable options for families, have now become a budgeting concern for consumers across the country, not just in California.
Companies like McDonald's have seen a 40% increase in prices since 2019, with rising food and labor costs, along with other business expenses contributing to the overall inflation. This trend has led to a shift in consumer behavior, with many people dining out less frequently and reconsidering fast food as a cost-effective meal option.
The current economic environment, marked by escalating costs across various sectors, has raised concerns about the sustainability of fast food chains as value players in the market. The original concept of fast food as an affordable and convenient dining option for families has evolved into a more expensive dining experience that requires careful budgeting.
