Starting on Monday, most California fast food workers will receive at least $20 per hour, making it one of the highest minimum wages in the nation.
A statute that raises the minimum wage, signed was signed by California Gov. Gavin Newsom (D) last September, following a push from the state’s fast food workers and labor unions, who organized several strikes demanding better working conditions and wages.
Advocates for the law argued that many of California's over 500,000 fast food workers are not adolescents seeking extra spending money, but adults with families to provide for, The Associated Press noted.
California’s minimum wage was previously $16 per hour, which was already among the highest in the U.S.
Before the law took effect, fast food workers earned about $34,530 annually, according to data in 2022 from the U.S. Census Bureau of Labor Statistics. This figure is lower than the California poverty line, which is about $36,900 for a family of four, according to a study from the Public Policy Institute of California and Stanford Center on Poverty and Inequality.
Despite this, California’s fast food worker average wage was still approximately $3 higher than the national average of $13.53 per hour for fast food workers.
The law had the support of the trade association representing fast food franchise owners, but many have since expressed concerns about the law's impact on business finances, as reported by the AP.
Alex Johnson, who owns 10 Auntie Anne’s Pretzels and Cinnabon locations in the San Francisco Bay Area, told the news service that his sales slowed this year, leading to office staff layoffs. He stated that the increase in minimum wage will cost him about $470,000 and necessitate price hikes between 5 percent and 15 percent at his establishments. He does not intend to hire new employees or expand to other locations in the state, he informed the AP.
“I try to do right by my employees. I pay them as much as I can. But this law is really hitting our operations hard,” Johnson said, according to the AP. “I have to consider selling and even closing my business. The profit margin has become too slim when you factor in all the other expenses that are also going up.”
The law also establishes a fast food council that has the authority to increase the wage annually through 2029 by 3.5 percent or the change in averages for the U.S. Consumer Price Index for urban wage earners and clerical workers — whichever is lower.
