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

LIVERMORE, Calif. (AP) — Most fast food workers in California will be paid at least $20 an hour beginning Monday when a new law is scheduled to kick in giving more financial security to an historically low-paying profession while threatening to raise prices in a state already known for its high cost of living.

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Democrats in the state Legislature passed the law last year in part as an acknowledgement that many of the more than 500,000 people who work in fast food restaurants are not teenagers earning some spending money, but adults working to support their families.

That includes immigrants like Ingrid Vilorio, who said she started working at a McDonald’s shortly after arriving in the United States in 2019. Fast food was her full-time job until last year. Now, she works about eight hours per week at a Jack in the Box while working other jobs.

“The $20 raise is great. I wish this would have come sooner,” Vilorio said through a translator. “Because I would not have been looking for so many other jobs in different places.”

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The law was supported by the trade association representing fast food franchise owners. But since it passed, many franchise owners have bemoaned the impact the law is having on them, especially during California’s slowing economy.

Alex Johnson owns 10 Auntie Anne’s Pretzels and Cinnabon restaurants in the San Francisco Bay Area. He said sales have slowed in 2024, prompting him to lay off his office staff and rely on his parents to help with payroll and human resources.

Increasing his employees’ wages will cost Johnson about $470,000 each year. He will have to raise prices anywhere from 5% to 15% at his stores, and is no longer hiring or seeking to open new locations in California, he said.

“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.

“I have to consider selling and even closing my business,” he said. “The profit margin has become too slim when you factor in all the other expenses that are also going up.”

Over the past decade, California has doubled its minimum wage for most workers to $16 per hour. A big concern over that time was whether the increase would cause some workers to lose their jobs as employers’ expenses increased.

Instead, data showed wages went up and employment did not fall, said Michael Reich, a labor economics professor at the University of California-Berkeley.

“I was surprised at how little, or how difficult it was to find disemployment effects. If anything, we find positive employment effects,” Reich said.

Plus, Reich said while the statewide minimum wage is $16 per hour, many of the state’s larger cities have their own minimum wage laws setting the rate higher than that. For many fast food restaurants, this means the jump to $20 per hour will be smaller.

Click here to read the full article in AP News

Comments

  1. AND the uneducated that don’t realize this is a setup and another way to eliminate capitalism! COVID government did a good start…this is just a continuation!

  2. What never seems to be talked about with these large increases in minimum wages is the effect on the “working poor” benefits. Programs like CHIP, SNAP, WIC, Section 8 housing assistance,. Medicaid (Medical in Kommiefornia) and the EITC (earned income tax credit) are all income based; the more you make, the lower your benefits. Most of those getting this “gift” 25% raise are about to find out that the “raise” will probably result in a lower standard of living either through layoff like the delivery drivers at pizza parlors or the reduction of these income based welfare benefits.
    And for the DemonRats in Sacramento, less benefits paid means more money for them to waste on more programs like medical coverage for illegal aliens.

  3. $20 an hour except for the Friends Of Newsom.

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