REPORT: Top Fast-Food Brands Can Absorb New CA Minimum Wage

Analysis finds fast-food companies can pay new CA minimum wage without increasing consumer prices or reducing employment.

March 28, 2024
Ariela Weinberger
(202) 412-4270

NEW YORK, NY — Ahead of California’s new fast-food minimum wage of $20 per hour set to go into effect on Monday, April 1, new analysis from the Roosevelt Institute of financial data from the past decade finds stark increases in fast-food industry operating profits and rising markups, suggesting that affected employers can absorb the increased operating costs associated with a higher industry minimum wage without increasing consumer prices or reducing employment. 

The analysis, “Fast-Food Industry Profiteering: Why California Businesses Can Absorb a Higher Minimum Wage” by Roosevelt’s deputy director for Worker Power and Economic Security Alí R. Bustamante and program manager for Macroeconomic Analysis Ira Regmi, presents evidence of increasing corporate profit margins and markups in the fast-food industry and of a strong fast-food labor market in California and across the country. 


Findings include: 

  • In 2023 alone, the 10 largest publicly traded fast-food companies spent $6.1 billion on share repurchases. Using the most generous—and unrealistic—assumptions, employers’ wage costs will increase by a maximum of $4.6 billion annually as a result of the minimum wage increase. To cover the cost of increased wages, fast-food companies could merely reduce—not even zero out—their returns to shareholders.
  • Over the past decade, fast-food prices increased by 46.8 percent compared to 28.7 percent for the average of all prices. In 2023, fast-food firms charged prices 27 percent above their production costs.
  • Between 2014 and 2023, operating profit margin growth among fast-food companies outpaced overall margin growth by 53 percent.

“According to the data, there’s no reason why the new fast-food minimum wage of $20 per hour in California should mean layoffs or increased prices,” said Alí Bustamante, deputy director for Worker Power and Economic Security at the Roosevelt Institute and coauthor of the paper. “Profits in the fast-food industry are sufficiently high to absorb the greater operating costs and ensure industry workers are paid fairly.” 

In 2022, fast-food industry employment in California had increased to approximately 553,000 workers—a 20.1 percent increase since 2014. Trends in the California fast-food labor market have mirrored the national averages. Yet between 2014 and 2023, the federal minimum wage remained stagnant at $7.25 per hour, while California’s minimum wage increased from $9 to $15.50 an hour—further evidence that California fast-food firms can readily adjust to minimum wage increases. 

To read more from this analysis, click here, or to speak to the coauthors, please reach out to


The Roosevelt Institute is a think tank focusing on corporate and public power, labor and wages, and the economics of race and gender inequality; advancing progressive policies that bring the legacy of Franklin and Eleanor Roosevelt into the 21st century.