California fast food workers now earn $20 minimum wage

Over half a million California fast food workers are getting a big bump up in pay with the new minimum wage set at $20.

A big win for those behind the counters, the $20 minimum wage in California took effect on Monday, April 1. Backers of the measure, including Gov. Gavin Newsom, have called it an essential need to provide workers with a livable wage.

Across the state, the minimum wage is set at $16 with some areas like San Diego nudging their base pay a bit above the threshold for workers within city or county lines.

However, some fast food giants are hinting at price increases to cover the costs. Restaurant industry officials warned it could lead to increased prices for consumers or reliance on automation over human jobs.

On Monday, California will raise the minimum wage for fast food workers to $20 an hour. NBC’s David Noriega has more on how the increase will affect customers. pic.twitter.com/zvjsclAipc

— TODAY (@TODAYshow) March 30, 2024

At a virtual conference on Monday, the Service Employees International Union (SEIU), alongside the Roosevelt Institute provided a counterargument. 

Their report suggests the fast food industry can stand the wage increase without resorting to layoffs. Adding a layer of financial nuance to the discussion, Ali Bustamante of the Roosevelt Institute explains, “Historical price hikes in fast food outpaced operational costs.”

Angelica Hernandez, a fast food worker represented by SEIU, said the increase will help her breathe a “little easier” in terms of paying her rent and buying groceries. She said the wage bump is a “huge raise” and that she and her colleagues will continue to fight for better wages and working conditions.

Meanwhile, from the franchise owners’ perspective, the situation is complex. Keith Miller, a Subway franchisee in Northern California reflects on the rising concern over minimum wages, hinting at the financial tightrope small business owners are walking on. 

“You keep kind of wondering when you’re going to break the camel’s back?” said Miller.

GAVIN NEWSOM STRUGGLES WITH CALIFORNIA MINIMUM WAGE LAW FALLOUT (MSN)

California’s recent decision to increase the minimum wage for fast-food workers from $15.50 to $20 per hour, effective April 2024, has ignited a significant debate about the impact it could have on the labor… pic.twitter.com/9ULlPY4T9H

— FXHedge (@Fxhedgers) March 31, 2024

Will your go-to meals cost more?

Chipotle’s Jack Hurting hinted at a “mid-single-digit price increase” in California. With no confirmations yet from Chipotle, Starbucks, Jack in the Box and McDonald’s, these businesses are also considering price increases or alterations in operations.

The law, Assembly Bill 1228,  boosts fast food workers’ earnings from the state’s minimum wage of $16 per hour to $20 per hour. Additionally, the law also establishes a Fast Food Council, representing a path forward to resolve “employer-community concerns while preserving fast food workers by securing a seat at the table to raise standards,” according to the office of Assemblyman Chris Holden, D-Pasadena, who introduced the bill.

The council will provide direction and coordinate with state powers to ensure the health, safety and employment of fast food workers. Responsibilities of the council will also include development of fastfood worker standards, covering wages, working conditions and training.

AB 1228 will impact more than 550,000 fast food workers and about 30,000 restaurants in the state, officials said.