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Fast-Food Employees Now Earn  An Hour In California

Fast-Food Employees Now Earn $20 An Hour In California

Fast-Food Employees Now Earn $20 An Hour In California

California now has a minimum wage law that requires fast-food chains to pay employees at least $20 an hour. As CBS News reported, the new law, which went into effect on April 1 after Governor Gavin Newsom signed the bill in 2023, specifically applies to fast-food chains with at least 60 locations across the country. While labor advocates applaud the bill, some restaurant owners have been critical of the new law, saying that this will result in higher prices for customers and possibly job losses.

While the minimum wage for all other employees in California remains at $16, over 553,000 fast-food workers in the state are now set up to earn higher wages. According to the Roosevelt Institute, the fast-food industry has seen an increase in profits in recent years, mainly because menu prices are rising at a higher rate than inflation.

“Prices have been so much higher than operating costs over the last decade that these companies could just absorb higher operating costs,” Roosevelt Institute labor expert Alí Bustamante, who also authored the analysis, told CBS MoneyWatch. “This is about raising the floor and making sure that $20 being the new minimum wage puts workers on a better economic footing to cover their household needs.”

Restaurant owners, however, say the new minimum wage will make it difficult to cover operational costs.

“We aren’t these big corporations with deep pockets — we’re not Wall Street, we are Main Street,” Alex Johnson, the owner of 10 franchised restaurants in the Bay Area, told CBS MoneyWatch.

Johnson adds that he will need to increase prices by about 10% this year due to the new law. Chipotle Chief Financial Officer Jack Hartung expressed similar concerns.

“We know we have to take something at a significant increase when you talk about a 20%-ish increase in wages,” Hartung told CBS News.

Chipotle locations across the country expect to see a 1% increase in prices following the new California law, Hartung added.

Labor advocates continue to emphasize of the new bill, saying it’s crucial for many employees who are struggling to survive. Tia Orr, a labor law advocate who works as executive director of the Service Employees International Union California, said a higher wage is “a transformational step toward an economy that works for all, not just billionaires.”

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