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California’s new $20 per hour minimum wage for fast food workers will go into effect on April 1, the result of a union-backed bill signed by Gov. Gavin Newsom last fall. (The final bill was a compromise, down from the original proposal of $22 per hour.) In June, a second bill raising wages for healthcare workers will also go into effect, with wages varying based on the type of facility and location, with minimum wages of $18, $21, or $23 per hour. Critics on the Right predict that means only nursing aides will be able to afford a $300 Big Mac, and all the restaurants will close as the economy collapses.
That’s pretty unlikely, given that California’s minimum wage is currently $16 an hour, thanks to a 2016 law that set the minimum wage at $15, with inflation adjustments. The new minimum for fast food will also be adjusted to keep up with inflation, with annual adjustments that will be the lower of either the cost of living, or 3.5 percent.
Following the pandemic recession, the food industry has already seen stiff competition for workers, so higher pay is one way of ensuring that there will be more workers available, since California rejects the red-state solution of allowing more child labor.
This is also where we point out that since that $15 wage went into effect in 2018, California has somehow remained economically viable, although there is a serious shortage of affordable housing, which has more to do with insane real estate markets, not a somewhat more livable wage. As the state Legislature’s nonpartisan policy analysis office points out, a number of California municipalities already have higher minimum wages than the state requires.
Also, when that law was passed in 2015, just the prospect of having to pay employees a little more three years in the future convinced a San Francisco bookstore to close up shop, but it was a science fiction book shop and so maybe they used their time machine to visit the hellscape of the Trump years, you never know.
Business Insider reports that the wage increase for fast food workers could also boost wages for workers in other jobs as employers try to hold on to workers.
Andy Barish, an analyst at Jefferies, pointed out that businesses with hourly-paid staff like convenience stores are going to have to work harder to compete for labor if their employees can “walk across the street” to a higher-paying job at a fast-food restaurant.
However, it’s unclear what impact the move will have on the sit-down restaurant business, where most waitstaff and bartenders already average over $20 hourly with tips. It’s possible that “back of house” jobs like chefs and prep cooks will see raises, or that restaurants will require tip-sharing with kitchen staff, according to analyst Brian Vaccaro of Raymond James, which is a financial services outfit, not a restaurant.
All in all, the wage hike was a win for labor, particularly since unions convinced fast food companies to drop a proposed referendum that would’ve rolled back the wage hike, in exchange for the Legislature’s agreement to not vote on another bill that would’ve made fast-food companies liable for their franchisees’ labor-law violations. Yeah, that would be good too, but compromise, art of the possible, and all that.
The law also preserved the bill’s creation of a “Fast Food Council” that will include representatives of both labor and management, which will be able to weigh in on safety and health regulations in the sector. Unfortunately, the law doesn’t require unionization of fast food restaurants, but union leaders believe the new council will make it more likely.
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[CalMatters / Business Insider / American Prospect]
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