California’s New Law
On April 1, California’s new minimum wage law officially went into effect. This law makes it mandatory for all fast-food workers to be paid at least $20 an hour.
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Only fast food workers are impacted by this law — and only workers who are employed by an establishment that has at least 60 locations nationwide. Other regular small business or restaurant workers do not get this minimum wage raise.
An Increase in Pay
Labor groups have long fought for fast food workers to make a living wage, as the industry had not seen a notable increase in minimum wage for years.
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As California’s cost of living continues to rise, the government increased the minimum hourly wage for fast food service workers to allow their income to reflect this increase in cost of living.
Effects of This Law
While many fast-food workers have applauded this increase in minimum wage, many critics have claimed that this new law will negatively impact the industry as a whole.
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Already, California has seen layoffs associated with this law. Many fast food establishments throughout the state have also raised menu prices across the board to still bring in profits while paying their employees more.
Helping Working-Class Californians
However, even with these issues after the law went into effect, labor groups across the state are still pushing for working-class Californians to see their hourly minimum wage be raised.
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One Fair Wage is one such group that is openly calling for more restaurant workers to see their wages rise to at least $20 an hour.
Why Workers Need More Money
One Fair Wage’s president Saru Jayaraman has talked about how many working class families cannot afford to live comfortably in California, thanks to the state’s high cost of living.
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Many people now have severe home and food insecurity because of rising housing prices and inflation. Homelessness also remains a huge issue throughout much of California. Therefore, Jayaraman has stated that working-class people need to be paid more.
Surviving in California
Jayaraman has claimed that many regular people cannot survive in California.
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“People are leaving the state or are not having children, not having families. These are all the very basics we should be thinking about for humans living in California and needing to survive,” Jayaraman explained. “I mean the level of crisis that people have been enduring since the pandemic is severe.”
Jayaraman’s Response to Critics
Many critics of this new California law have claimed that a higher minimum wage will only bring about even more job losses and hiked-up menu prices. Jayaraman rejects these allegations.
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Jayaraman said, “That is the argument they always make. Every single time the minimum wage goes up, they always say it’s going to kill business, jobs will be lost, and we’ve never seen it happen. Not in California, not in any other state. It has never happened.”
Menu Price Increases
Jayaraman also talked about how menu prices have already increased — yet consumers are still buying the items.
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“Frankly, inflation has already happened, and many prices have already gone up. Grocery store prices have already gone up. And so, it’s not a matter of we can’t raise wages anymore because prices might go up,” she stated.
Consumers Are Dealing With High Prices
According to Jayaraman, consumers are continuing to deal with high prices at restaurants and fast food locations because of inflation.
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If prices continue to rise because employers are now paying their employees a living wage, she believes that consumers will keep paying these high prices.
Helping the Economy
Jayaraman also believes giving employees a higher wage across the restaurant industry will help people in California survive, yet it will also aid the economy in the long run.
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People will have more money in their pockets, which will then result in people having more money to spend. This could help stimulate the economy.
Worries Remain
Despite Jayaraman’s claims against critics of this new California law, worries do remain for many throughout the state. Various restaurants have stated they will continue to raise prices, or cut jobs.
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A better analysis of this law and how it has impacted California will be seen in the months to come, as fast-food restaurants get used to this increase in minimum wage.