LIVERMORE, Calif. — Most fast food workers in California will be paid at least $20 an hour starting Monday, but the new law provides additional economic security for a historically low-wage occupation while already A new law is set to come into force that threatens to raise prices in the United States. It is known for its high cost of living.
Democrats in the state Legislature passed the law last year as part of a recognition that many of the more than 500,000 fast-food workers are adults working to support their families, rather than teenagers earning pocket money. was approved.
That includes immigrants like Ingrid Vilorio, who started working at McDonald’s shortly after arriving in the United States in 2019.
Until last year, her full-time job was in fast food. Currently, 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 come sooner,” Vilorio said through an interpreter. “Because I wouldn’t have looked for so many jobs elsewhere.”
The legislation was supported by industry groups representing fast food franchise owners.
But since the law was passed, many franchise owners have lamented the impact it is having on their companies, especially as California’s economy has slowed.
Alex Johnson owns 10 Auntie Anne’s Pretzel and Cinnabon restaurants in the San Francisco Bay Area. He said his sales slowed in 2024 and he had to lay off his office staff and rely on his parents to help with payroll and human resources.
Raising employee wages would cost Johnson about $470,000 each year.
He said he had to raise store prices anywhere from 5% to 15% and is no longer hiring or opening new stores in California.
“I try to do the right thing by my employees. I pay them as much as I can. But this law is a huge blow to our operations,” Johnson said.
“You have to think about selling your business or going out of business,” he said. “Profit margins have become very slim considering that other expenses have also increased.”
Over the past decade, California has doubled the minimum wage for most workers to $16 an hour.
A big concern at the time was that the hike would cause some workers to lose their jobs because it would increase spending for employers.
Rather, the data shows wages are rising and employment is not falling, said Michael Reich, a professor of labor economics at the University of California, Berkeley.
“I was surprised at how little the impact of unemployment is, or how difficult it is to find. If anything, we see a positive effect on employment,” Reich said.
Additionally, Reich said the statewide minimum wage is $16 an hour, but many of the state’s largest cities have higher wages in their own minimum wage laws.
For many fast food restaurants, this means a smaller jump to $20 an hour.
The law reflected a carefully crafted compromise between the fast food industry and labor unions, which have been fighting for nearly two years over wages, benefits and legal liability.
The law emerged during closed-door negotiations between unions and industry, including the unusual step of signing non-disclosure agreements.
The law applies to restaurants that are part of a national chain with at least 60 locations nationwide and that offer limited or no table service.
Restaurants that operate within a grocery store or that make or sell bread as a separate menu item are exempt.
Initially, the bread exemption appeared to apply to Panera Bread restaurants. Bloomberg News reported that the change would benefit Mr. Newsom’s wealthy campaign donor, Greg Flynn.
But Newsom’s administration said the Raise the Wage Act applies to Panera Bread because it doesn’t make its dough on-site.
Mr. Flynn also announced that he would pay his employees at least $20 an hour.
