Fast food workers across California are celebrating as the minimum wage for many of them rose to $20 per hour on Monday. The hike, signed into law last year by Democratic Governor Gavin Newsom, brings joy to employees but also sparks warnings of potential price increases in a state already grappling with a high cost of living.
Angelica Hernandez, a McDonald’s employee in Los Angeles, expressed relief, saying, “It’ll help me breathe a little easier in terms of paying my rent and even buying groceries.” Hernandez, who has worked in the industry for 19 years, hailed the raise as “a huge raise,” contrasting it with the minimal increases she had seen previously.
The increase affects over half a million workers in the fast-food sector in California, with globally recognized chains like Burger King and Taco Bell, as well as smaller local brands like In-N-Out Burger.
Tia Koonse, from the University of California, Los Angeles, emphasized that the majority of fast food workers in California are women and people of color, earning a median wage significantly below the state average. She stated, “Well over half are over 25… and a quarter are actually the main earners in their home.”
However, some chains are warning of potential price hikes and job losses due to increased labor costs. Jack Hartung, CFO of Chipotle Mexican Grill, expressed concerns about further price increases to cover wage hikes, while Alexander Johnson, who operates franchises of Cinnabon bakeries and Auntie Anne’s, hinted at possible layoffs and higher prices to offset rising costs.
Economists remain divided on the impact of minimum wage increases. While some argue it could benefit millions of workers, others caution it could lead to job losses. Koonse pointed out that California has added jobs to the fast-food industry since minimum wage increases began in 2015, suggesting that layoffs may not be necessary.