New $20 minimum wage for fast food workers in California set to start Monday


Livermore: Most fast food workers Workers in California will be paid at least $20 an hour starting Monday, when a new law is supposed to provide greater financial security to the historically low-paying profession despite an already high cost of living. Prices in the state are threatened to rise.
Democrats in the state Legislature passed the law last year partly in recognition that many of the more than 500,000 people who work at fast food restaurants are not teenagers earning a few pennies, but adults. Who work to support their families.
This includes immigrants like Ingrid Vilorio, who said she started working at McDonald's soon after arriving in the United States in 2019. Fast food was his full-time job until last year. Now, she works about eight hours a week at Jack in the Box while working other jobs.
“The $20 increase is great. I wish it had happened sooner,” Vilorio said through a translator. “Because I wouldn't be looking for so many jobs in different places.”
The legislation was supported by the trade association representing fast food franchise owners. But since its passage, many franchise owners have lamented the impact this law has had on them, especially during California's slow economy.
Alex Johnson is the owner of 10 Auntie Anne's Pretzels and Cinnabon restaurants in the San Francisco Bay Area. He said sales have slowed in 2024, forcing him to lay off his office staff and rely on his parents for help with payroll and human resources.
Raising the salaries of his employees would cost Johnson approximately $470,000 per year. He will have to raise prices in his stores by 5% to 15%, he said, and he is no longer leasing or seeking to open new locations in California.
“I try to do the right thing by my employees. I pay them as much as I can. But this law is really hurting our operations,” Johnson said.
“I have to consider selling and even closing my business,” he said. “When you factor in all the other expenses the profit margin becomes very thin.”
Over the past decade, California has doubled it minimum wage $16 an hour for most workers. A major concern at the time was whether the increase would cause some workers to lose their jobs because employers' expenses would increase.
Instead, the data showed that wages have risen and employment has not declined, said Michael Reich, a professor of labor economics at the University of California-Berkeley.
Reich said, “I was surprised by how small or how difficult it was to detect unemployment effects. If anything, we found positive employment effects.”
Also, Reich said that while the statewide minimum wage is $16 an hour, many of the state's larger cities have their own minimum wage laws that set the rate higher than that. For many fast food restaurants, that means a $20 per hour increase.
The legislation reflects a carefully crafted agreement between the fast food industry and labor unions, which have been fighting over wages, benefits and legal liabilities for nearly two years. The legislation originated during private negotiations between unions and industry, which included the unusual step of signing confidentiality agreements.
The law applies to restaurants that offer limited or no table service and that are part of a national chain with at least 60 establishments nationwide. Restaurants that operate inside a grocery establishment are exempt, as well as restaurants that produce and sell bread as a stand-alone menu item.
At first, it appeared that the bread discount applied to Panera Bread restaurants. Bloomberg News reported that the change would benefit Greg Flynn, a wealthy campaign donor to Newsom. But the Newsom administration said the wage increase law applies to Panera Bread because the restaurant does not make dough on site. Additionally, Flynn has announced that he will pay his employees at least $20 an hour.

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