California’s fast food workers are about to see a significant increase in their paychecks, with a new minimum wage of $20 per hour set to take effect soon.
The decision to raise the minimum wage was made by the state legislature in September 2023.
This new law will apply to fast food restaurants that do not offer full table service and are part of national chains with at least 60 locations across the country. However, fast food restaurants located within grocery stores or those primarily selling bread as a standalone item will be exempt from this requirement.
While this wage increase is welcomed by many workers, some fast food franchise owners have expressed concerns about its impact on their businesses.
For instance, Alex Johnson, who owns several Auntie Anne’s Pretzels and Cinnabon restaurants in the San Francisco Bay Area, has seen a slowdown in sales in 2024, leading to layoffs and financial strain.
Johnson estimates that the wage increase will cost him approximately $470,000 annually, forcing him to consider raising prices at his stores and halting plans for expansion in California.
Despite these challenges, data from the past decade has shown that previous increases in the minimum wage have not resulted in significant job losses.
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Michael Reich, a labour economics professor at the University of California-Berkeley, noted that wages have increased without a corresponding decline in employment.
Overall, while the wage increase will benefit many fast-food workers in California, it also presents challenges for franchise owners who must navigate the financial implications of higher labor costs.
