Fries, drink, and inflation

THANKS TO a new minimum wage law, consumers in the Golden State are paying more for fast-food meals as restaurant owners and franchise operators pass on increased operating costs. Prices at quick-service restaurants in California rose 10 percent since September as the minimum wage for fast-food workers there hit $20 an hour on April 1.

“The consumer is price weary,” admitted Ian Borden, chief financial officer for McDonald’s, in an April 30 earnings call. “We certainly are going to be prudent and thoughtful about any further price increases we are looking at for the rest of 2024,” he said.

Chick-fil-A’s 11 percent increase between Feb. 15 and April 15 was the largest price jump in California, according to restaurant data by Gordon Haskett. A grilled chicken club meal in Hollywood cost $15.75 in May, compared with $12.39 in San Antonio.

Fast-food customers in other states may need to tighten their belts, too. McDonald’s CEO Chris Kempczinski said in the earnings call he expects price hikes nationwide, citing a nearly 10 percent increase in labor costs. That would come on the heels of steady menu price increases since 2019 to offset high labor, food, and paper costs during the COVID-19 pandemic.

California legislators and unions negotiated a deal in 2022 that bumped the hourly wage for fast-food workers to $4 above the current state minimum, arguing it’s not just teenagers who work at fast-food restaurants. The law applies only to national fast-food chains with at least 60 restaurants.

Survey finds renting more affordable than a mortgage

It’s currently cheaper to rent than to own a home in all 50 of the nation’s largest metro areas. According to a Bankrate survey released April 29, the typical home costs almost 37 percent more now to buy than to rent on a monthly basis. In 21 of the metros surveyed, the monthly cost of owning is at least 50 percent more than the cost of renting.

Rents have risen nearly 30 percent in the past four years, but increases have slowed since the pandemic in nearly all parts of the country, according to Zillow. On the sales side, record-high home prices, stubbornly elevated mortgage rates, and low inventory continue unabated. The monthly mortgage for a typical home purchased this year has more than doubled since 2019. Renting may be cheaper now, but the dream to buy and build wealth lives on. —T.V.