Minimum wage for California fast food workers jumps to $20 an hour as of April 1
SACRAMENTO – California's new minimum wage law is taking a bite out of the bottom line for fast food franchises.
On Monday, April 1, a new law kicked in that raised the minimum wage for California fast food workers to $20 an hour.
It's a move getting mixed reactions, with employees saying it's deserved after years of inequities in the industry in terms of wages and treatment
"It would help out so much," said fast food worker Maria Hernandez. "Diapers themselves are super expensive."
While others say the consequences could leave many jobless.
What fast food chains are affected by the new law?
Chains, such as McDonald's and Starbucks, with 100 or more outlets nationwide are targeted by the minimum wage hike.
Notably, the law doesn't apply to restaurants with on-site bakers that sell bread as a stand-alone item – a point of contention that saw California Gov. Gavin Newsom field some criticism over possible favoritism of a wealthy Panera Bread franchisee who has donated to the governor's campaigns.
In a statement after the criticism, Newsom's office argued that Panera Bread is not exempt from the law.
California's minimum wage for most other jobs is $16.
How are chains reacting to the California fast food minimum wage hike?
The law impacts franchise owners of major stores with 60 other locations nationwide hard. Layoffs and store closures are forecasted.
An initiative promoted by two industry groups did get enough signatures to qualify for the 2024 Primary Election ballot. The initiative would have given California voters the final say on whether to keep or overturn the fast food minimum wage law.
The original measure would have raised employee wages to as much as $22 an hour. However, a deal was struck between lawmakers and franchise groups that allowed the minimum wage to go up to $20 in exchange for the initiative being pulled.
Experts say past wage increases in California did not lead to employers laying off workers to compensate for a more expensive employee payroll.
"Employers have had it very good. Profits are high in the industry," said Michael Reich with UC Berkeley. "And so there's also room for them to absorb the wage increases."
Chains are also warning customers about more expensive food costs that could increase prices 5 to 15 percent.
