California fast-food restaurant owners are quietly getting huge pay raises after the state raised its minimum wage to $20, even as major chains raised prices and some closed stores.
While the increase in workers’ wages from $16 an hour has garnered much attention, another provision that has received less attention since the controversial law took effect on April 1 also increases pay for fast-food restaurant managers by 25 percent, from $66,560 to at least $83,200.
At Raising Cane’s, a fast-growing chicken chain, general managers across the state can earn annual salaries as high as $174,000 with bonuses based on store sales and profits. According to the Wall Street Journal:.
Monique Pizano, the 27-year-old general manager of Raising Cane’s in Carson, California, about 15 miles south of Los Angeles, saw her annual base salary rise from $79,000 to $85,000 after the law took effect, according to The Wall Street Journal.
Pizano, who oversees 96 employees, is eligible for monthly bonuses of $5,000 to $7,500 if he hits certain financial targets at the Baton Rouge, Louisiana-based chain, which has about 90 of its 700 stores in California.
The Carson store serves an average of 700,000 customers annually and generates approximately $9 million in annual sales.
“It was a life-changing event for my family,” Pizano told the Journal.
But the fast food minimum wage law has been painful for many California businesses.
Recent research has shown that Analytics company Placer.ai Since the new law came into effect, visits to popular fast food chains such as McDonald’s, Wendy’s and Burger King have been found to have decreased.
The report found that over the eight weeks from April to May, Burger King’s customer traffic fell 3.86%, Wendy’s was down 3.24% and McDonald’s was down 2.5%.
Meanwhile, Rubio’s Coastal Grill has been forced to close dozens of locations in California after the company recently filed for Chapter 11 bankruptcy protection, citing rising costs of doing business in the state.
Another fast-food chain, Foster’s Freeze, recently closed a location near Fresno after the franchise owner said he could no longer afford to pay increased wages to employees.
In the six months before the new law took effect, fast-food prices in California rose an average of 7%, forcing the state’s franchisees to cut hours, postpone capital spending and rush to install automated features like self-service kiosks.
Fast-food chains including Wendy’s, Chipotle, Starbucks, and Taco Bell have raised menu prices by up to 8% in preparation for the new minimum wage law, according to a report released earlier this year by Kalinowski Equity Research.
The law has also been blamed for In-N-Out Burger’s decision to raise menu prices.
In Los Angeles County, In-N-Out’s double-double burger combo is selling for $11.44, up $0.76 from last year.
