Starting Monday, most fast food workers in California will see their minimum wage increase to at least $20 an hour as a new law goes into effect. This law was passed by California Democrats last year in an effort to provide more financial security to the over 500,000 individuals who work in fast food. Many of these workers are adults supporting their families, like Ingrid Vilorio, an immigrant who has found stability in her multiple fast food jobs as a result of this wage increase.
While the law was supported by the fast food franchise industry, many owners have expressed concerns about the impact it will have on their businesses, especially during California’s slowing economy. For example, Alex Johnson, who owns multiple Auntie Anne’s Pretzels and Cinnabon restaurants in the Bay Area, is bracing for the significant financial implications of increasing his employees’ wages. He anticipates having to raise prices and considers the potential of selling or closing his stores due to the slim profit margins.
The wage increase marks another step in California’s efforts to raise the minimum wage for workers over the past decade, which has doubled to $16 per hour. Despite initial concerns that this increase would lead to job losses, data has shown that employment has remained stable or even increased as wages went up. Labor economics professor Michael Reich from UC Berkeley noted that some larger cities in California already have minimum wage laws that exceed the statewide rate, making the transition to $20 per hour less drastic for some businesses.
The law was the result of a compromise between the fast food industry and labor unions, who had been in negotiations for two years over wages, benefits, and legal issues. Reflecting a careful balance, the law applies to fast food restaurants with limited or no table service that are part of national chains with at least 60 locations. However, some establishments like those operating within grocery stores or specializing in bread as a stand-alone menu item are exempt from the law. While there was initial confusion about the specific exemption for bread producers, the Newsom administration clarified that Panera Bread would still be subject to the wage increase due to its business model.
Overall, the wage increase for fast food workers in California represents a significant step towards improving the financial security of low-wage workers in the state. While some business owners may face challenges in adjusting to the higher wages, the data suggests that increasing the minimum wage has not led to widespread job losses in the past. By striking a balance between industry needs and worker protections, the law reflects a collaborative effort to address the economic realities faced by fast food employees, many of whom rely on these jobs to support themselves and their families.
