Posted on 04/01/2024 11:03:21 AM PDT by Red Badger
LIVERMORE, Calif. — 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.
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.”
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.
The law reflected a carefully crafted compromise between the fast food industry and labor unions, which had been fighting over wages, benefits and legal liabilities for close to two years. The law originated during private negotiations between unions and the industry, including the unusual step of signing confidentiality agreements, KCRA 3 first reported.
The law applies to restaurants offering limited or no table service and which are part of a national chain with at least 60 establishments nationwide. Restaurants operating inside a grocery establishment are exempt, as are restaurants producing and selling bread as a stand-alone menu item.
At first, it appeared the bread exemption applied to Panera Bread restaurants. Bloomberg News reported the change would benefit Greg Flynn, a wealthy campaign donor to Newsom. But the Newsom administration said the wage increase law does apply to Panera Bread because the restaurant does not make dough on-site. Also, Flynn has announced he would pay his workers at least $20 per hour.
Cost and wage end up getting into an upward horse race neck and neck.
How much of a subsidy is Greg Flynn getting State and Federal?
- Prices will go higher because gov't is forcing higher costs
- Fewer businesses/outlets because higher prices will lower demand because of inaffordability causing many business/outlets to fail.
The Left succeeds in doing what it always does: cause shortages and impoverishment.
Here’s something else to know: thousands have already been fired and more are to come. I was at my local
McDonald’s last week. They have one of the production lines sealed off now and they’re politely insisting that ordering be done at the kiosk
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.
Wow, what quality research and data. This guys is ready to document the climate “crisis” next.
Soon even our hamburgers will be made in China.
“...that many of the more than 500,000 people who work in fast food restaurants are not teenagers...”
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Soon to be, “the more than 200,000 people who work in fast food restaurants.”
The ones that are left.
I have a problem with the idea that a job flipping burgers should support a family of four. It has always been a “starter job”. Some go on to become managers, franchisees, but most move on to more skilled work. Why would a person “arrived” in America have no more skills than that, ie: none? We already have plenty like that. Somehow, bleeding heart liberals feel they can mandate the very turning of the world. Is this the end of the fast food industry, or are people really going to pay the necessary increases in price to eat that garbage?
I maybe wrong, but I foresee an increase in automation and a loss in jobs. But of course our great poilticians couldn’t care less.
$20/hr is $41,600 annually based on a full-time schedule. That’s not going to support anyone in Calipornia.
I guess very soon cheap ass burgers will become a luxury item.
With all the various costs that go into fast food, why is it labor gets all the attention. You never see this “Gound beef goes up 20% to $8.00 many burger places will go out of business”.
The anti-labor chicken hawks are out in force. Many must physically whip their employees.
I live in a small town in Arizona. Low cost of living.
The In-And-Out restaurant pays about $19, minimum. And yet their burgers are about $4.
In general, I’m opposed to high minimum wages. But some establishments can pay a high wage, and still keep prices low, such as In-And-Out.
Before manufacturing was offshored your statement was probably true. ( 30 years ago)
New $20 minimum wage for fast food workers and what’s the minimum wage for everyone else ?
I went to a local sandwich place the other day. I rarely eat out. It was 16 dollars for a sandwich. Everything is worse with the “leadership” of this disgusting chomo and the democrat crooks.
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