ECONOMY & WORK
MONEY 101
NEWS
PERSONAL FINANCE
NET WORTH
About Us Contact Us Privacy Policy Terms of Use DMCA Opt-out of personalized ads
© Copyright 2023 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
MARKETREALIST.COM / ECONOMY & WORK

California's $20 Fast-Food Minimum Wage Is Official; Workers Happy, But Owners Wary

The newly enacted law pertains to all restaurant chains with over 60 locations.
PUBLISHED APR 2, 2024
Cover Image Source: An employee serves french fries at the world's oldest operating McDonald's restaurant | Getty Images | Photo by David McNew
Cover Image Source: An employee serves french fries at the world's oldest operating McDonald's restaurant | Getty Images | Photo by David McNew

The minimum wage for fast-food employees in California has been raised from $16 to $20 per hour. Effective as of Monday, the new law covers all restaurant chains with more than 60 nationwide locations. Signed by California Governor Gavin Newsom last September, following extensive advocacy efforts by workers within the state's fast-food sector, the legislation aims to enhance wages and working conditions. The law also establishes a fast-food council authorized to annually adjust wages until 2029, either matching inflation rates or increasing by 3.5%, whichever is lesser.



 

The legislation stemmed from advocacy efforts by California's fast-food workers and labor unions, who organized many strikes and demonstrations advocating for improved wages and working conditions within the fast-food industry.

As reported by the Associated Press, proponents of the law contend that a significant portion of the 500,000-plus fast-food workers are not teenagers seeking supplemental income, but adults striving to support their families. Many of these workers are women, immigrants, and individuals from marginalized communities, often residing below the poverty threshold.

"The $20 raise is a welcome development. I only wish it had happened sooner. Had it been implemented earlier, I wouldn't have had to seek out additional employment opportunities in various locations," expressed one immigrant fast-food worker.



 

According to the U.S. Census Bureau of Labor Statistics, fast food workers in California made about $34,530 per year in 2022. However, a study found that this wage falls below the state's poverty line.

Despite earning less, the average wage for fast food workers in California was approximately $3 higher than the national average of $13.53/hour for such workers, given the state's minimum wage of $16 per hour—one of the highest in the United States, The Hill reported.

hipotle restaurant workers fill orders for customers | Getty Images | Photo by Joe Raedle
Image Source: Chipotle restaurant workers fill orders for customers | Getty Images | Photo by Joe Raedle

Although the law garnered support from the trade association representing fast-food franchise owners, many individual franchise owners have voiced concerns about its repercussions, especially within California's decelerating economy.

The wage raise has ignited a contentious discussion regarding its potential effects on fast food prices within the state and its ramifications for smaller franchise restaurant proprietors. According to NPR, many fast-food executives have suggested a price surge of approximately 2.5% to 3.5% to counterbalance the wage escalation.

Moreover, franchises such as Jack in the Box, McDonald's, Starbucks, and Chipotle have all cautioned about imminent price rises, adding to the increases that several restaurants have already implemented due to high inflation. Despite a slowdown in inflation, the cost of dining out has remained elevated nationwide.



 

Besides the price hikes, numerous restaurants and fast food chains have revealed intentions to enhance automation as a means to reduce expenses. This includes the implementation of kiosks and robots in various operations.

For instance, Pizza Hut in California made headlines by announcing layoffs of over 1,000 delivery drivers in anticipation of the wage hike. The renowned pizza chain has instead opted for delivery through mobile apps such as Uber Eats and DoorDash, shifting the burden of delivery fees onto the customers.

MORE ON MARKET REALIST
Guests on the show would run with it if they ever got that kind of money on Pawn Stars.
11 hours ago
The guest even said to keep the kids in the dark about how valuable these items were.
13 hours ago
The company had fantastic sales but a crushing debt with a high interest rate that the sharks hated.
16 hours ago
It was only Carey's second season in the show and he could have been part of a massive scandal.
1 day ago
“I won’t say anything, and you know why,” he said, with a gesture to zip his lips.
1 day ago
The ring was rescued by the guest's mother thanks to a stranger early in the morning.
1 day ago
"She blanked out. It happens to the best of us," a fan sympathized with the player.
1 day ago
The instrument originally belonged to the guest's grandfather who suffered a horrific injury.
2 days ago
The contestant's wife seemed embarassed at that point of time, and worried as well.
2 days ago
The co-founders of Dino Don got the shark that they always wanted on board.
2 days ago
One can understand why the measure is in place but the shopper was having none of it.
2 days ago
"My husband and I definitely noticed it! We had to rewind it a few times," a fan reacted.
2 days ago
All of the sharks agreed that she had a great product and the drive to be successful a businesswoman.
3 days ago
It's possible that the dog played a little part in making it easier for them to get a deal.
3 days ago
Without the help of his wife, the contestant would have gone home empty-handed.
3 days ago
The pawn store owner had a valid point since the item the guest had brought had numerous issues.
3 days ago
The contestant got the first part of the puzzle right but wasn't able to solve it in time.
3 days ago
"It's a lady's robe. A robe from 1750 is a very rare robe. The only other ones I know of this type, you'd have to go to Beijing," the appraiser said.
4 days ago
Harvey also got other hilarious answers, but nothing could match the woman's sass.
4 days ago
The Gronkowski family is famous for their contributions to America's sporting culture.
4 days ago