For months now, fast food industry leaders have been stating that they’ll have to cut jobs thanks to California’s new $20 minimum wage law. However, new data has revealed that the opposite has seemingly happened — fast food companies are hiring more workers.
According to new Southern California data, fast food hiring has hit a new record high as many Californians seek out these higher-paying jobs.
California’s New Fast Food Law
On April 1, California’s new fast food law officially went into effect after Governor Gavin Newsom signed it into law. This legislation requires fast food chains with 60 or more locations nationally to pay their employees at least $20 an hour.
Supporters of this law have long stated that this legislation will help workers in an industry that hasn’t seen a wage increase in decades. This law is also supposed to help Californians who are struggling to keep up with the state’s high cost of living.
Business Leaders Sound Alarm
However, even before this law went into effect, business leaders in California have been warning that this legislation will harm fast food companies across the board.
These critics have explained that raising the minimum wage will cut into profits, which may then cause menu prices to increase.
Job Cuts in California
Many of these business owners have also claimed that they will have to cut jobs in order to afford this new, higher, minimum wage.
In some cases, this has occurred. Various reports of job cuts — or even fast food closures — in California have occurred since this legislation went into effect.
New Data Paints a Different Picture
However, not all of the data shows what business leaders have long warned. In fact, new data from the O.C. Register has shown that hiring has actually hit a new high in Southern California.
Therefore, instead of fast food companies firing workers, this data shows that fast food establishments are hiring a record number of workers — even if they have to pay them more.
An All-Time High
In the O.C. Register, Jonathan Lansner explained that data in Southern California has shown that fast food hiring has hit an all-time high.
“Employment Development Department numbers show [Southern California] had 361,500 fast food workers in June – an all-time staffing high for these dining establishments that employ 4.5% of all Southern California’s workers,” Lansner noted.
A Sudden Increase in Hiring
Lansner further noted that many fast food owners haven’t halted hiring or cut their staff — even though they’ve publicly claimed they will have to.
Instead, fast-food employment has risen by 400 since June. Since March, which was before the law went into effect, fast-food employment has gone up by 7,600.
A Good Year for Hiring
Lansner also explained that all this data from the Employment Development Department shows that Southern California has had a good year for fast food hiring.
In all, staffing for fast food establishments is up by 3,000 in just one year.
What This Data Reveals
This data, therefore, reveals that at least Southern California has been able to thrive under this new minimum wage law. Fast food workers, who make up about 4.5% of the population in this region, have therefore been able to find good-paying jobs in the past few months.
However, there is always the possibility that this law is impacting various parts of California — a very large state — differently. For example, Southern California could be thriving under this law, while others may not be.
Will Menu Prices Rise?
Californians have also had to deal with menu prices rising after this new law went into effect. That may also continue, especially as this period of high inflation is ongoing.
However, some analysts do believe that fast food menu prices will eventually go down — even in expensive regions of California.
McDonald’s $5 Meal
Many fast food establishments have realized that their customers are no longer going to eat at their restaurants, as the menus have become too expensive.
So many Americans have even felt that fast food is now a luxury they cannot afford. As a result, various fast-food companies have tried to lure consumers back in. McDonald’s has even released a new $5 meal promotion.
An Extension
This $5 meal has seemingly done so well for McDonald’s that the company revealed it would be extending its promotion.
Now, the $5 meal will be staying around a bit longer. Other fast-food establishments may follow suit, as many of them have also revealed discounted meals in the past few months.
