California Increases minimum wage for fast food workers

On Apr. 1, the minimum wage for fast food workers was increased from $16 an hour to $20 an hour as an attempt to provide aid to the low-paid workers, some of whom are homeless or supporting more than one person on their wage. 

The minimum wage increase was implemented solely within California law, affecting only those working within the fast food industry while non-fast food industries retain an average of $16 per hour. This was signed partly to attract more workers to the industry along with other benefits due to the hit it took during the pandemic. The wage increase only affects food chains with 60 or more locations nationwide—such as McDonald’s and Starbucks for example—increasing the pay of around 553,000 fast-food workers.

This is not the first wage increase of this year. On Jan. 1, the minimum wage of all workers increased from $15.50 an hour to $16.00 an hour. This was an inflation adjustment, affecting 1 million workers. The impact is limited, however, due to significant wage growth in low-paying jobs, which happened as a reaction to the falling unemployment rate. 

Many restaurant workers focus on supporting themselves and their families, especially those living in a high-cost area. As inflation increases, some struggle to afford to rent houses with the rising housing prices. Economic Roundtable, a nonprofit research organization, has found that fast food workers make up 11 percent of homeless workers and 6 percent of the total homeless population in California. Fast food workers' annual pay is only 27 percent of the yearly pay of workers in other industries due to the part-time hours they work. Dalyla Cunningham (’25), a student worker, explains her opinion on the connection between homelessness and the fast food industry. 

“A lot of people who are homeless work in fast food because, often, people who are hiring will only take homeless people if they are fast food,” Cunningham said. “You know, if you’re trying to get a job at a bank or something that's not going to work if you don’t have an address and all that…which is why a lot of fast food workers I know have to work extra hours to get food and water and maybe pay off rent.”

The wage increase has brought up discussions about whether workers will be replaced with technology, such as self-service kiosks. As the price of labor rises, some companies might turn to technology to minimize the added expenses. As well, it may lead to employers hiring fewer workers or cutting down hours- which could lead to understaffing. 

Understaffing can cause a multitude of issues, such as increased stress, exhaustion, drop in work quality, loss of sales and customers and wage increase pressure placed on consumers. When there isn't enough staff, those working are met with more tasks and deadlines- some of which are perpetually unable to be met. This can lead to a loss of productivity as the worker becomes less engaged in their work and could even suffer injuries. Exhaustion is yet another effect of understaffing- as staff are working even more than before. This, along with the other issues, can lead to staff looking for jobs somewhere else, which only leads to more understaffing. 

 However, higher wages mean less turnover—the time to replace employees who have left the company—as the wage increase will create a more sustainable work environment. The decrease in turnover could improve productivity, team dynamics and company culture. An increase in wages means a far more stable financial situation for those employed and strengthens the low-wage workers' buying power- which boosts local economies by increasing demand for certain products. The wage increase means a reduced reliance on government programs for financial assistance, as it could lift them out of poverty and be more financially independent, leading to lower taxes or relocation of those funds to more needed programs. An article by Cal Matters says that some economists speculate that the change within price points for the food items will be minimal, not enough to deter people from buying their meals at the restaurants. Cunningham said she believes that fast-food workers deserve a higher minimum wage because of the expectations and time they spend on helping customers. 

“I know for a lot of people it definitely is hard to kind of manage both [school and work],” Cunningham said. “I  think considering everything that these people are doing to provide a service to the community, they absolutely deserve the higher pay.”