Suhauna Hussain, Los Angeles Times

In the early 2000s, after a severe slump, McDonald’s orchestrated a major turnaround, with the introduction of its Dollar Menu.

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The menu, whose items all cost $1, illustrated just how important it was to market to low-income consumers — who value getting the most bang for their buck.

Coming at a time of flagging growth, tumbling stock and the company’s first report of a quarterly loss, the Dollar Menu reversed the fast-food giant’s bad fortune. It paved the way for three years of sales growth at stores open at least a year and ballooned revenue by 33%, news outlets reported at the time.

But no longer.

Industry-wide, fast-food restaurants have seen traffic from one of its core customer bases, low-income households, drop by double digits, McDonald’s chief executive Christopher Kempczinski told investors last week. Meanwhile, traffic from higher earners increased by nearly as much, he said.

The struggle of the Golden Arches in particular — long synonymous with cheap food for the masses — reflects a larger trend upending the consumer economy and makes “affordability” a hot policy topic, experts say.

McDonald’s executives say the higher costs of restaurant essentials, such as beef and salaries, have pushed food prices up and driven away lower-income customers who already are being squeezed by the rising cost of groceries, clothes, rent and child care.

With prices for everything rising, consumer companies concerned about the pressures on low-income Americans include food, automotive and airline businesses, among others, analyst Adam Josephson said. “The list goes on and on,” he said.

“Happy Meals at McDonald’s are prohibitively expensive for some people, because there’s been so much inflation,” Josephson said.

Josephson and other economists say the shrinking traffic of low-income consumers is emblematic of a larger trend of Americans diverging in their spending, with wealthier customers flexing their purchasing power and lower-income shoppers pulling back — what some call a “K-shaped economy.”

A recent earnings report from Delta offers yet another illustration. While Delta’s main cabin revenue fell 5% for the June quarter compared to a year ago, premium ticket sales rose 5%, highlighting the divide between affluent customers and those forced to be more economical.

At hotel chains, luxury brands are holding up better than low-budget options. Revenue at brands including Four Seasons, Ritz-Carlton and St. Regis is up 2.9% this year, while economy hotels experienced a 3.1% decline for the same period, according to industry tracker CoStar.

“There are examples everywhere you look,” Josephson said.

Consumer credit delinquency rates show just how much low-income households are hurting, with households that make less than $45,000 annually experiencing “huge year-over-year increases,” even as delinquency rates for high- and middle-income households have flattened and stabilized, said Rikard Bandebo, chief strategy officer and chief economist at VantageScore.

After COVID-19-related stimulus programs ended, these households were the first to experience dramatically increased delinquency rates, and haven’t had a dip in delinquencies since 2022, according to data from VantageScore on 60-day, past-due delinquencies from January 2020 to September 2025. And although inflation has come down from its peak in 2022, people still are struggling with relatively higher prices and “astronomical” rent increases, Bandebo said.

A report released this year by researchers with Joint Center for Housing Studies at Harvard University found that half of all renters, 22.6 million people, were cost-burdened in 2023, meaning they spent more than 30% of their income on housing and utilities, up 3.2 percentage points since 2019 and 9 percentage points since 2001. Twenty-seven percent of renters are severely burdened, spending more than 50% of their income on housing.

As rents have grown, the amount families have left after paying for housing and utilities has fallen to record lows. In 2023, renters with annual household incomes under $30,000 had a median of just $250 per month in residual income to spend on other needs, an amount that’s fallen 55% since 2001, with the steepest declines since the pandemic, according to the Harvard study.

“It’s getting tougher and tougher every month for low-income households to make ends meet,” Bandebo said.

Mariam Gergis, a registered nurse at UCLA who also works a second job as a home caregiver, said she’s better off than many others, and still she struggles.

“I can barely afford McDonald’s,” she said. “But it’s a cheaper option.”

On Monday morning she sat in a booth at a McDonald’s in MacArthur Park with two others. The three beverages they ordered, two coffees and a soda, amounted to nearly $20, Gergis said, pointing to the receipt.

“I’d rather have healthier foods, but when you’re on a budget, it’s difficult,” she said.

Her brother, who works as a cashier, can’t afford meals out at all, she said. The costs of his diabetes medication has increased greatly, to about $200 a month, which she helps him cover.

“He would rather go hungry than eat outside,” Gergis said. The bank closed his credit cards due to nonpayment, she said, and he may lose his housing soon.

Prices at limited-service restaurants, which include fast-food restaurants, are up 3.2% year over year, at a rate higher than inflation “and that’s climbing,” said Marisa DiNatale, an economist at Moody’s Analytics.

On top of that, price increases because of tariffs disproportionately affect lower-income households, because they spend a greater portion of their income on goods rather than services, which are not directly impacted by tariffs. Wages also are stagnating more for these households compared to higher- and middle-income households, DiNatale said.

“It has always been the case that more well-off people have done better. But a lot of the economic and policy headwinds are disproportionately affecting lower-income households, and [McDonald’s losing low-income customers] is a reflection of that,” DiNatale said.

It makes sense, then, that any price increases would hit these consumers hard.

According to a corporate fact sheet, from 2019 to 2024, the average cost of a McDonald’s menu item rose 40%. The average price of a Big Mac in 2019, for example, was $4.39, rising in 2024 to $5.29, according to the company. A 10-piece McNuggets Meal rose from $7.19 to $9.19 in the same time period.

The company says these increases are in line with the costs of running a restaurant — including soaring labor costs and high prices of beef and other goods.

Beef prices have skyrocketed, with inventory of the U.S. cattle herd at the lowest in 75 years because of the toll of drought and parasites. And exports of beef bound to the U.S. are down because of President Trump’s trade war and tariffs. As a result the prices of ground beef sold in supermarkets is up 13% in September, year-over-year.

McDonald’s also has placed blame on the meat-packing industry, accusing it of maneuvering to artificially inflate prices in a lawsuit filed last year against the industry’s “Big Four” companies — Tyson, JBS, Cargill and the National Beef Packing Company. The companies denied wrongdoing and paid tens of millions of dollars to settle lawsuits alleging price-fixing.

McDonald’s chief financial officer Ian Borden said on the recent earnings call that the company has managed to keep expenses from getting out of control.

“The strength of our supply chain means our beef costs are, I think, certainly up less than most,” he said.

McDonald’s did not disclose how the company gauges the income levels of fast-food customers, but businesses often analyze the market by estimating the background of their customers based on where they are shopping and what they are buying.

In California, the debate around fast-food prices has centered on labor costs, with legislation going into effect last year raising the minimum wage for fast-food workers at chains with more than 60 locations nationwide.

But more than a year after fast-food wages were boosted, the impact still is being debated, with economists divided and the fast-food industry and unions sparring over its impact.

Fast-food restaurant owners as well as trade associations like the International Franchise Assn., which spearheaded an effort to block the minimum wage boost, have said businesses have been forced to trim employee hours, institute hiring freezes or lay people off to offset the cost of higher wages.

Meanwhile, an analysis by researchers at UC Berkeley’s Center on Wage and Employment Dynamics of some 2,000 restaurants found the $20 wage did not reduce fast-food employment and “led to minimal menu price increases” of “about 8 cents on a $4 burger.”

Labor groups have argued that minimum wage increases give workers more purchasing power, helping to stimulate the economy.

McDonald’s said last year that spending by the company on restaurant worker salaries had grown around 40% since 2019, while costs for food, paper and other goods were up 35%.

The success of its Dollar Menu in the early 2000s was remarkable because it came amid complaints of the chain’s highly processed, high-calorie and high-fat products, food safety concerns and worker exploitation.

As the company marketed the Dollar Menu, which included the double cheeseburger, the McChicken sandwich, french fries, a hot fudge sundae and a 16-ounce soda, it also added healthier options to its regular menu, including salads and fruit.

But the healthier menu items did not drive the turnaround. The $1 double cheeseburgers brought in far more revenue than salads or the chicken sandwiches, which were priced from $3 to $4.50.

“The Dollar Menu appeals to lower-income, ethnic consumers,” Steve Levigne, vice president for United States business research at McDonald’s, told the New York Times in 2006. “It’s people who don’t always have $6 in their pocket.”

The Dollar Menu eventually became unsustainable, however. With inflation driving up prices, McDonald’s stores, particularly franchisee locations, struggled to afford it, and by November 2013 rebranded it as the “Dollar Menu & More” with prices up to $5.

Last year McDonald’s took a stab at appealing to cash-stretched customers with a $5 deal for a McDouble or McChicken sandwich, small fries, small soft drink and four-piece McNuggets. And in January it rolled out a deal offering a $1 menu item alongside an item bought for full price, with an ad starring John Cena, and launched Extra Value Meals in early September — offering combos costing 15% less than ordering each of the items separately.

The marketing didn’t seem to immediately resonate with customers, with McDonald’s in May reporting U.S. same-store sales in the recent quarter declined 3.6% from the year before. However, in its recent third-quarter earnings, the company reported a 2.4% lift in sales, even as its chief executive sounded the alarm about the increasingly two-tiered economy.

The iconic brand still has staying power, even with prices creeping up, some customers said.

“Everywhere prices are going up. This is the only place I do eat out, because it’s convenient,” said Ronald Mendez, 32, who said he lives about a block away from the McDonald’s in MacArthur Park.

D.T. Turner, 18, munched on hash browns and pancakes, with several still-wrapped McMuffins and cheeseburgers sitting on the tray between him and his friend. In total, their haul cost about $45, he said. He eats at McDonald’s several times a week.

“We grew up eating it,” Turner said.

His friend chimed in: “The breakfast is great, and nuggets are cool.”

That other businesses also are reviving deals is a sign of the times. San Francisco-based burger chain Super Duper promoted its “recession combo” on social media. For $10, customers get fries, a drink and a “recession burger” at one of the chain’s 19 California locations.

What’s clear is companies are wary of passing along higher costs to customers, said DiNatale, of Moody’s Analytics.

“A lot of businesses are saying, ‘we just don’t think consumers will stand for this,’” DiNatale said. Consumers “have been through years of higher prices, and there’s just very little tolerance for higher prices going forward.”

©2025 Los Angeles Times. Visit at latimes.com. Distributed by Tribune Content Agency, LLC.

By Cheryl Platzman Weinstock, KFF Health News

National Domestic Violence Hotline: People who have experienced domestic abuse can get confidential help at thehotline.org or by calling 800-799-7233.

The immigrant from India believed her husband when he said that if she wasn’t gone by the time he got to their Georgia home in 10 minutes, he would kill her.

She said her husband and his family, who are also immigrants, abused her throughout their marriage, beating her with a belt, pouring hot water on her, cutting her, and pushing her head through a wall.

“Several times I tried to escape, but they found me and brought me back home,” said the woman, who is in the country illegally and spoke on the condition of anonymity because she is afraid being identified would harm her chances of gaining legal status.

With no time to run after her husband’s call in July 2020, she dialed 911, even though she knew she could be deported. The police arrived to find the husband threatening her with a knife in front of their young children, she recalled. He was arrested but not prosecuted, she said.

The woman and her children sought services from the Tahirih Justice Center, a national nonprofit organization that serves immigrant survivors of gender-based violence. She is still winding through the immigration process five years later.

Besides immigrants’ increased vulnerability to sexual violence, they face a host of mental health and physical challenges, researchers say. They have high rates of post-traumatic stress disorder, depression, suicide, and anxiety, according to a 2024 study.

“Personally, I know anxiety related to the current political climate is precipitating expensive emergency room visits and negatively impacting people’s ability to get to work and make a living,” said Nicole E. Warren, a nurse midwife and an associate professor at the Johns Hopkins School of Nursing in Baltimore.

Immigrants without legal status also face increased rates of chronic conditions and higher death rates from preventable diseases due to their limited access to health care and their fear of seeking it, advocates say.

“One of our clients was so afraid to leave her home that she avoided seeking medical care during her pregnancy, out of fear of interacting with ICE,” said Miriam Camero, director of client advocacy, social services, at Tahirih.

Food banks have reported that many immigrants in need of food assistance have stopped coming, for fear of deportation.

It has always been difficult for people without legal immigration status to get help when they need it. The Trump administration’s crackdown on people in the country illegally has intensified the pressure. The situation has also hampered the advocates and attorneys who defend their rights.

“We’re working extra hours to do all the work,” said Vanessa Wilkins, executive director of Tahirih’s office in Atlanta. “The safety planning and added protection that clients might need, including documents just to make sure they are safe, can definitely make you feel overwhelmed.”

U Visas

For domestic abuse survivors without legal status, like the woman from India, going to the authorities seems more fraught amid the immigration crackdown, said Maricarmen Garza, chief counsel of the American Bar Association Commission on Domestic & Sexual Violence.

“There are just no guarantees,” Garza said, “especially with how law enforcement is intertwined in enforcing immigration law.”

In more than half of states, U.S. Immigration and Customs Enforcement agents can collaborate by formal written agreements with state and local law enforcement agencies to identify and remove people in the country illegally. Advocates say this can interfere with victims’ efforts to get a certificate to file for a “U visa,” which would allow them to live and work in the U.S. with the possibility of lawful permanent residency.

The battered woman from India recalls police telling her that if she did not press charges, she could get a certificate for a U visa. She agreed to their suggestion but recalls the anxiety of filing about five abuse reports over two years to get the certificate. “I got panic attacks just writing them down, because it meant I was reliving the situations again,” she said.

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When asked for comment about the difficulties immigrant domestic violence victims face, White House spokesperson Abigail Jackson touted President Donald Trump’s efforts to crack down on illegal immigration. “The president’s successful effort to deport criminal illegal aliens is making all victims safer and ensuring they will never again be harmed by dangerous criminal illegal aliens,” Jackson said in a statement. She said “allegations without evidence” that immigrants have been told to drop charges “should not be taken seriously.”

Immigrant women without legal status can be particularly vulnerable to abuse and exploitation because of language barriers, as well as cultural and social isolation, researchers have found.

According to a 2023 report, lifetime rates of abuse by intimate partners range up to 93% in some immigrant groups, compared with about 41% of U.S.-born women experiencing such abuse in their lifetime.

As the Trump administration reshapes the country’s immigration system, survivors of violence who entered the country illegally have a tough time proving their abuse and trauma to get relief, advocates say.

A refugee health and asylum program at Johns Hopkins in Baltimore provides immigrant victims of abuse with free forensic evaluations to support their claims for humanitarian relief, including applications for U visas.

Warren, the program’s associate director for women’s health, said that in the past, a written affidavit of the clinic’s findings was enough to corroborate an applicant’s legal accounts of past trauma.

“Now, we are getting requests for our in-person testimony,” Warren said.

Application Backlogs

The woman from India applied for a visa after she received a certificate from law enforcement allowing her to do so in 2023. Hers is one of nearly 11.6 million pending visa applications, according to data through June — the highest volume of cases ever recorded by U.S. Citizenship and Immigration Services. The number of pending U visa applications is 415,000, according to the agency.

Only about 10,000 U visas are issued per year, and it can take more than seven years to process applications, Garza said.

Adding to the pressure, the Trump administration has reduced the availability of Section 8 housing, which helps low-income individuals and others pay their rent. As of September, people without legal authorization to be in the United States are not eligible to receive rental help over U.S. citizens.

“If Tahirih wasn’t behind me, I could be homeless,” said the woman, who said she can afford only half her rent.

Victims’ advocates say they are working harder than ever to support their clients but are stretched thin as they face federal funding cuts and increased demand.

The Tahirih center reported a 200% increase in call volume in the four months after Trump took office, compared with the same period last year.

“At the end of the day there are a lot of emails and a lot of people we aren’t able to reach as quickly as in the past,” said Casey Carter Swegman, the center’s director of public policy.

To reach immigrant survivors of abuse who are afraid to come forward, advocates are “getting back to basics,” said Joanna Otero-Cruz, executive director and president of the Philadelphia group Women Against Abuse.

“We’re doing grassroots outreach to hairdressers and other small-business owners,” she said. “They’re the eyes and ears for us.”

In Riverhead, New York, a 38-year-old woman who emigrated from El Salvador said she has twice been the victim of domestic abuse but was too scared to report it to police.

She said the second assault was by a man for whom she cooked and cleaned in his home. The woman, who spoke on the condition of anonymity because of her sense of shame and her fears of deportation, said he raped her, took pictures of her naked, and threatened to put them on social media if she tried to go to the police. He then stalked her, she said.

Noemi Sanchez, Long Island regional coordinator for the Rural & Migrant Ministry, a nonprofit that supports farm workers, is working closely with the woman to elevate her self-esteem and help her understand that “no woman deserves to have a man mistreat them.”

Meanwhile, the survivor from India received a temporary work permit in 2024 and is employed as a certified nursing assistant, which “helps me survive,” she said.

“I have really come a long way,” she added. “It wasn’t easy. I had great support behind me. They didn’t let me down.”

©2025 KFF Health News. Distributed by Tribune Content Agency, LLC.

By KEN SWEET, AP Business Writer

NEW YORK (AP) — President Trump nominated Stuart Levenbach as the next director of the Consumer Financial Protection Bureau, using a legal maneuver to keep his budget director Russell Vought as acting director of the bureau while the Trump administration continues on its plan to shut down the consumer financial protection agency.

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Levenbach is currently an associate director inside the Office of Management and Budget, handling issues related to natural resources, energy, science and water issues. Levenbach’s resume shows significant experience dealing with science and natural resources issues, acting as chief of staff of the National Oceanic and Atmospheric Administration during Trump’s first term.

Levenbach’s nomination is not meant to go through to confirmation, an administration official said, speaking on condition of anonymity to discuss personnel matters. Under the Vacancies Act, Vought can only act as acting director for 210 days, but now that Trump has nominated someone to the position, that clock has been suspended until the Senate approves or denies Levenbach’s confirmation as director. Vought is Levenbach’s boss.

The CFPB has been nonfunctional much of the year. Many of its employees have been ordered not to work, and the only major work the bureau is doing is unwinding the regulations and rules it put into place during Trump’s first term and during the Biden administration.

While in the acting director role, Vought has signaled that he wishes to dismantle, or vastly diminish, the bureau.

The latest blow to the bureau came earlier this month, when the White House said it does not plan to withdraw any funds from the Federal Reserve, which is where the bureau gets its funding, to fund the bureau past Dec. 31. The White House and the Justice Department used a legal interpretation of the law that created the bureau, the Dodd-Frank Act, that the Fed must be profitable in order to fund the CFPB’s operations. Several judges have rejected this argument when it was brought up by companies, but it’s never been the position of the government until this year that the CFPB requires the Fed to be profitable to have operating funds.

“Donald Trump’s sending the Senate a new nominee to lead the CFPB looks like nothing more than a front for Russ Vought to stay on as Acting Director indefinitely as he tries to illegally close down the agency,” said Sen. Elizabeth Warren, the top Democrat on the Senate Banking Committee, in a statement.

The bureau was created after the 2008 financial crisis as part of the Dodd-Frank Act, a law passed to overhaul the financial system and require banks to hold more capital to avoid another financial crisis. The CFPB was created to be a independent advocate for consumers to help them avoid bad actors in the financial system.

By ILLIA NOVIKOV

KYIV, Ukraine (AP) — A large Russian drone and missile barrage on Ukraine’s western city of Ternopil killed at least 25 people, including three children, authorities said Wednesday, as President Volodymyr Zelenskyy went to Turkey in search of diplomatic support for his fight against Russia’s invasion.

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The nighttime attack hit two nine-story apartment blocks in Ternopil, located around 120 miles from the Polish border, according to Interior Minister Ihor Klymenko. At least 73 people, including 15 children, were injured, emergency services said.

At least 19 among those killed were burned alive, including three children aged 5, 7 and 16, Klymenko said. Two dozen people are still unaccounted for, he said on national television, and rescuers expect to work at least two more days to complete the search of rubble.

Russia fired 476 strike and decoy drones, as well as 48 missiles of various types, at Ukrainian targets overnight, Ukraine’s air force said. The bombardment included 47 cruise missiles, with air defenses intercepting all but six of them, the air force said. Western-supplied F-16 and Mirage-2000 jets intercepted at least 10 cruise missiles, it said.

“Every brazen attack against ordinary life indicates that the pressure on Russia (to stop the war) is insufficient,” Zelenskyy wrote on the messaging app Telegram.

Zelenskyy meets with Turkish president

Zelenskyy met with Turkey’s President Recep Tayyip Erdogan in Ankara later Wednesday as part of his efforts to diplomatically isolate Russian President Vladimir Putin and bring more international pressure to bear on him. Putin has so far resisted making compromises, despite U.S. pressure.

In brief statements to the press, Zelenskyy and Erdogan expressed their commitment to finding a peaceful settlement. Turkey is a key broker in the Black Sea region, preserving relations with both Ukraine and Russia.

“We count on the strength of Turkish diplomacy, on (how) it’s understood in Moscow,” Zelensky said.

Zelenskyy said before the talks that he had seen “some positions and signals from the United States” about the war. He didn’t elaborate but tough new American sanctions on Russia’s oil industry, devised to push Putin to the negotiating table, are due to take effect on Friday.

A senior Turkish official initially said that U.S. special envoy Steve Witkoff would join Zelenskyy in Turkey, but backtracked later in the day and said Witkoff wouldn’t be coming. The official spoke on the condition of anonymity Tuesday because he wasn’t allowed to speak publicly about the arrangements.

An Army official confirmed Wednesday that U.S. Army Secretary Dan Driscoll is in Ukraine for negotiations. The official, who spoke on condition of anonymity in order to discuss sensitive travel plans, said that Driscoll is accompanied by Army Chief of Staff Gen. Randy George and Gen. Chris Donahue, commander of U.S. Army Europe and Africa.

Romania and Poland scramble fighter jets

Ternopil sits in a part of relatively peaceful western Ukraine, where many people from the east and south moved to as they fled danger along the front line.

Almost 50 people were injured in Russian strikes on three other Ukrainian regions.

Russia’s Defense Ministry said it attacked Ukrainian energy facilities and military-industrial targets, including long-range drone depots, in retaliation against strikes by Kyiv on Russian territory.

Two Eurofighter Typhoon jets and two F-16s were scrambled in Romania when a drone entered the NATO member’s airspace during the Russian attacks, Romania’s Ministry of National Defense said.

The Polish military said that Polish and allied aircraft were deployed in the middle of the night as a preventive measure. Poland’s Rzeszów and Lublin airports were closed temporarily to prioritize military aviation, the Polish Air Navigation Services Agency said.

In northeastern Kharkiv, Ukraine’s second-largest city, Russian drones injured 46 people, including two girls, the head of the regional military administration, Oleh Syniehubov, wrote on Telegram. Drones hit several city districts, at least 16 residential buildings, an ambulance station, school and other civilian infrastructure, he said.

Russia’s Defense Ministry said Wednesday that Ukraine fired four American-supplied ATACMS missiles at the Russian city of Voronezh on Tuesday. All four were shot down, the ministry said, but the debris damaged a private house, an orphanage and a gerontology center. There were no casualties, the ministry said.

Ukraine’s General Staff on Tuesday reported firing ATACMS missiles at Russia without offering details.

Associated Press writer Stephen McGrath in Leamington Spa, England, contributed to this report.

Follow AP’s coverage of the war in Ukraine at https://apnews.com/hub/russia-ukraine