Chick-fil-A has a huge and fiercely loyal fan base of customers.
But all of that could change.
And Chick-fil-A customers may not be as loyal as they used to be, as the chain was forced to make some major changes.
Gavin Newsom vs. restaurants
California Governor Gavin Newsom continued his war against businesses by enacting AB 1228.
The piece of legislation made fast food workers in California the highest paid in the country by law, with $20 per hour.
The new wage is a 25% increase over the minimum wage for other workers in the state.
Newsom signed the bill into law essentially to buy off Big Labor support.
Inevitable backlash
Democrats’ economic policy constantly pretends as if laws of economics are just a suggestion.
Company profit margins are far smaller than leftists think, so companies are going to defray costs however they can when hit with artificial labor increase.
One way is to pass on the increases to consumers with higher prices for goods and services.
That’s precisely what happened in California at Chick-fil-A, McDonald’s, Chipotle, and other restaurants.
The Wall Street Journal reported that “The price for a spicy chicken sandwich at that location had gone up to $7.09 from $6.29, or 13%, since mid-February, according to research by Gordon Haskett Research Advisors. . .Chick-fil-A’s prices increased 10.6% on average in California during that time period, Gordon Haskett found.”
Ronald McDonald had similar bad news for his french fry lovers.
The global fast food giant told Fox News in a statement, “Despite the challenging operating environment for small business owners in California, we and our franchisees remain committed to our heritage of providing great value. . .While pricing is set by individual franchisees and varies by restaurant, McDonald’s is competitive when it comes to affordability across the state.”
Chipotle delivered similar news.
The Journal added that “Chipotle said in an investor call Wednesday that prices at its nearly 500 California restaurants climbed 6% to 7% during the first week of April compared with last year, playing out across its menu.”
Laurie Schalow, Chipotle’s chief corporate affairs officer, told Fox News, “Similar to others in the restaurant industry, we implemented a statewide price increase in light of new legislation in California increasing the wages of restaurant workers.”
There’s no such thing as a free fast-food lunch
Democrats think that raising the minimum wage will help workers.
The reality is that when workers lose their jobs, the real minimum wage is effectively zero.
Study after study shows that artificial minimum wage increases lead to reduced employment.
The price increases are also speeding up the transition to automation, which will put even more workers out of a job.
Democrats don’t care about the carnage these policies unleash on the intended beneficiaries.
They also do not care about rising inflation, which eats into the purchasing power of the employees who did not get fired.
Are voters finally catching onto Democrat economic policies?
Informed American will keep you up-to-date on any developments to this ongoing story.
