The Associated Press reports that starting April 1, a new law in California will raise the minimum wage for most fast-food workers to $20 per hour, marking a significant increase in pay for an industry historically known for its low wages. The move to provide greater financial stability to fast-food workers also poses challenges for franchise owners and could impact consumer prices.
While the law received support from the trade
association representing fast-food franchise owners, its implementation has raised concerns among owners like Alex Johnson, who operates multiple Auntie Anne’s Pretzels and Cinnabon restaurants. Johnson noted the financial strain the wage increase will place on businesses, leading to potential layoffs, increased prices, and operational challenges.Still, data from the past decade suggests that previous minimum wage increases in California did not lead to significant job losses, according to Michael Reich, a labor economics professor at the University of California, Berkeley. He noted that while the statewide minimum wage is currently $16 per hour, many cities in California have their own higher minimum wage laws.
The legislation, passed by Democrats in the state legislature last year, acknowledges that many fast-food workers are not teenagers earning extra spending money but adults supporting themselves and their families.
Ingrid Vilorio, an immigrant who has worked in the fast-food industry, expressed appreciation for the wage increase, noting its positive impact on workers’ lives.
“The $20 raise is great. I wish this would have come sooner,” Vilorio stated, reflecting the sentiments of many workers who have long awaited such a change.
The new law reflects a compromise between the fast-food industry and labor unions, with negotiations spanning close to two years. The legislation applies to fast-food establishments with limited or no table service and belonging to national chains with at least 60 locations nationwide. However, certain exemptions apply, such as restaurants operating within grocery stores and those primarily focused on selling bread as a standalone menu item.
Despite the initial confusion over exemptions for certain establishments like Panera Bread, the (Gavin) Newsom administration clarified that the wage increase law applies universally, ensuring that workers across the industry benefit from the $20 minimum wage mandate.