Starbucks increased their prices? In California, coffee enthusiasts are feeling the pinch as their daily coffee habit becomes significantly more expensive.
The catalyst for this price hike is the introduction of a new law, AB-1228, which went into effect statewide on Monday. Signed by Governor Gavin Newsom last September, the legislation not only aims to enhance labor conditions in the fast-food industry by establishing a “Fast Food Council” but also mandates a $20 minimum wage for employees at fast-food chains with over 60 locations nationally. This includes popular brands such as Starbucks, McDonald’s, and Pizza Hut.
Immediate Impact on Starbucks
Starbucks, known for its corporately owned stores, witnessed an immediate price adjustment following the enactment of AB-1228.
According to a Business Insider (BI) analysis, Starbucks’ pricing on a variety of menu items saw an increase ranging from $0.50 to $1.00. This was confirmed by comparing previous receipts against the current pricing structure.
A spokesperson for Starbucks acknowledged the price adjustments in California stores as a direct response to the new minimum wage requirements, though they refrained from detailing the average price increase per menu item.
Financial Implications for Consumers
For those accustomed to indulging in Starbucks on a daily basis, this price hike is not insignificant. BI’s findings suggest that the typical increase on a standard $5.00 order is approximately $0.80, translating to a 15% rise.
Over the course of a year, this could mean an additional $208 spent on coffee alone, assuming a single daily purchase. This figure climbs even higher for individuals who frequent Starbucks more than five times a week or purchase snacks alongside their beverages.
Reactions and Repercussions
While the intent behind the price increase is to compensate for the higher labor costs, thereby preventing wage compression across the board in California, the reaction among regular patrons varies.
Some express understanding and support for the higher wages awarded to baristas, yet find the heightened costs difficult to accept. Discontent has spilled over onto social media, with one Reddit user candidly expressing their shift towards using a Nespresso machine at home as a more economical alternative, criticizing Starbucks for the price adjustments.
California law AB-1228: Fast food workers get a raise
California has made history with the implementation of its new law, AB-1228, which enacts a $20 minimum wage for fast-food workers. This law, which took effect on April 1st, 2024, will impact roughly 3,000 fast-food establishments statewide.
The law is the culmination of years of organizing by the Fight for $15 and a Union movement. Labor advocates celebrate AB-1228 as a crucial victory in achieving a livable wage, while some business owners express concerns about potential layoffs due to increased costs.
Key Provisions of Assembly Bill 1228
- Minimum Wage Increase: The law mandates a $20 hourly minimum wage for fast-food workers, subject to certain exceptions.
- Fast Food Council: AB-1228 establishes a Fast Food Council within California’s Department of Industrial
- Relations. This council brings together workers, industry representatives, and government officials to establish new health and safety standards, giving workers a strong voice in their working conditions.
