Fast food franchise owners, workers see $20 hourly wage increase with some concern
It was another busy day for the workers at a Wienerschnitzel in East San Jose, but one thing was different.
For long time employee Abel Hernandez, nothing about the work changed today, but he'll see a bump in his next paycheck. He was already earning over the minimum wage of $16 an hour, but now he'll go up to $20 an hour.
Hernandez said the wage increase won't amount to much extra for him, but he does worry that his hours will be cut.
And he said he wants what's best for him and his employer.
"It will be good for some, but not the bosses," Hernandez said in Spanish.
He was talking about owners Jeremy Marques and his father Joseph. They built up successful Wienerschnitzel franchises in San Jose and Gilroy over the past 33 years.
"It's going to cost us about $5,000 dollars more per store, which we have three. So, if you multiply that by 12, you're looking at hundreds of thousands of dollars," Jeremy Marques said. "It's not the raises but the restaurant industry being targeted. That's what irks us."
He said his stores are raising prices on some items by 10 to 20 cents, but they also offer specials and coupons.
They are scaling back hours for workers to the bare minimum, and taking up the slack by increasing the hours he and his father put in.
"To be honest with you, I've been working 14 straight days. And it will be three weeks without a day off because of what I've had to do schedule wise," he said.
U.C. Berkeley professor Michael Reich has studied the economics of wage increases in California for more than two decades. Reich said the fast-food industry in California is healthy and not in danger because of this increase.
"This cost shock is affecting all of the employers in the industry at the same time. So therefore, your price increase is going to be matched by price increases everywhere else, so you won't lose market share," Reich said. "A ten-cent increase in a burger, consumers will say, 'Oh gee, it's $5.10 now instead of $5.' But they're not going to change their behavior."
One customer who supports the workers is bracing for higher prices.
"It's good, but it's kind of bittersweet because everything else goes up," said Corina Fernandez as she ordered lunch for her and her children.