Fast food workers in California are celebrating a pay raise that brings their minimum wage to $20 an hour. While this is good news for the workers, companies are warning of likely price increases in an already costly state. Large chain restaurants, such as McDonald’s and Pizza Hut, will now offer one of the highest base rates in the country. For workers like Angelica Hernandez, who works at a McDonald’s in Los Angeles, this pay raise will make it easier to afford rent and groceries. She mentions that in her 19 years in the industry, a maximum raise of 25 cents per year was the norm, so this increase is significant.
Julieta Garcia, a Pizza Hut worker from Guatemala, emphasizes the importance of the wage hike due to the high cost of living in California. She shares that even with $100, it is difficult to cover expenses at the supermarket, and rents are increasing each year. More than half a million people in California are employed in the fast food sector, working for well-known chains like Burger King and Taco Bell, as well as local brands like In-N-Out Burger.
Tia Koonse from the University of California, Los Angeles Labor Center highlights that the majority of workers in the industry are women and people of color. Their median annual wage of $25,800 is significantly lower than the state average of $43,000. She dispels the misconception that fast food workers are primarily teenagers seeking pocket change, stating that most workers are over 25 years old, with a quarter being the primary earners in their households.
Passed into law last year by Democratic Governor Gavin Newsom, the California legislation regarding the minimum wage applies to establishments with little or no table service and at least 60 locations nationwide. Some chains have expressed the need to raise prices to cover wage costs and have warned of potential job losses. For instance, Chipotle Mexican Grill, headquartered in California, has already raised prices four times in the past two years and is contemplating further increases of up to nine percent. Alexander Johnson, who operates franchises of Cinnabon bakeries and Auntie Anne’s in the San Francisco Bay area, mentioned considering layoffs and higher prices to cover the $470,000 increase in costs.
Economists have differing opinions on the impact of the minimum wage, which is federally set at $7.25 but varies widely by state. A congressional study found that raising the federal minimum wage to $17 an hour could benefit 18 million people over five years but might result in the loss of 700,000 jobs. UCLA’s Koonse argues that layoffs in California are unlikely and unnecessary. She notes that since the minimum wage started rising in 2015, California has added 142,000 jobs to the fast food industry. Additionally, she points out that some outlets in expensive cities within the state already pay staff over $20 an hour due to local rules or market forces. Koonse suggests that instead of layoffs, the industry’s major players could share their record profits from 2018 onwards, which were further boosted by the pandemic, with the lowest-paid workers in California.
© 2024 AFP
