Beginning Monday, most fast food workers in California will be paid at least $20 per hour, marking one of the highest minimum wages in the country.
A law increasing the minimum wage, signed by California Gov. Gavin Newsom (D) last September, followed a push from the state’s fast food workers and labor unions, which held various strikes calling for better working conditions and wages.
Proponents of the law argued that many of the more than 500,000 fast food workers in the Golden State are not teenagers looking for extra spending cash, but rather adults with families to support, The Associated Press reported.
California’s minimum wage had been $16 per hour, which was already among the highest in the U.S.
Prior to the measure going into effect, fast food workers were making about $34,530 per year, according to data in 2022 by the U.S. Census Bureau of Labor Statistics. That amount is lower than the California poverty line, which is around $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 around $3 higher than the national average of $13.53 per hour for fast food workers.
The law had the support of the trade association that represents fast food franchise owners, but many have since expressed concerns over the law’s impact on business finances, the AP noted.
Alex Johnson, the owner of 10 Auntie Anne’s Pretzels and Cinnabon restraints in the San Francisco Bay Area, told the news service his sales slowed this year, leading him to lay off his office staff. He reportedly said the increase in minimum wage will cost him about $470,000 and require him to raise prices between 5 percent to 15 percent at his locations. He does not plan to hire new employees or try to open other locations in the state, he told 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 creates a fast food council that is able to increase that wage each year 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.