The minimum wage for fast food workers in California rose from $16 to $20 an hour on Monday, a move contested by industry bosses who fear having to inflict price increases on American customers. Employees of large hamburger or taco chains now enjoy one of the highest minimum salaries in the United States.
“It will help me breathe a little easier to pay my rent and even my groceries
,” said Angelica Hernandez, who works at a McDonald's in Los Angeles.
With 19 years of experience, punctuated by increases of
“maximum 25 cents per year”
reserved for good workers, this employee relishes the measure.
“The increase means a lot, (...) the work is hard here
,” Erik Salvador, employed six to eight a day in a McDonald's on the famous Hollywood Boulevard, told AFP. The fast-food industry employs more than half a million people in California, through world-famous chains like Burger King and Taco Bell, but also smaller local brands like In-N-Out.
The vast majority of workers in this sector are women and Latino or African-American, with a median annual salary of $25,800, according to Tia Koonse of the University of California, Los Angeles (UCLA). Well below the Californian median salary, which reaches $43,000.
“There is a common misconception that fast food workers are teenagers working for pocket money or the latest iPad
,” she told reporters.
“In reality, more than half of them are over 25 and a quarter are the main earner in the household.”
This revaluation will help workers who are much more likely than others to fall below the official poverty line, she added. The new law in this Democratic state only applies to establishments that offer little or no table service and that have at least 60 restaurants in the United States. Some chains assure that they will have to increase their prices to absorb costs, in one of the most expensive states in the country, where the historic inflation of recent years has already left its mark.
“Everyone is going to have to pay more
,” Jack Hartung, Chipotle’s chief financial officer, told the Wall Street Journal.
Towards mass layoffs?
Based in California, this Mexican fast-food chain has raised its prices four times in the last two years to keep up with inflation. It is considering further increases of up to 9% to cover salary increases. Franchisees of some chains are openly talking about layoffs. At the head of several Cinnabon pastries and Auntie Anne's pretzel stores in the San Francisco area, Alexander Johnson is talking about possible job cuts to cover a measure that will cost him $470,000.
“That means we have to raise prices, which we don't want to do
,” he told ABC7.
Economists are divided on the impact of an increase in the minimum wage, set at $7.25 at the federal level, but which varies considerably from one state to another. Raising the federal minimum wage to $17 an hour could help 18 million people over the next five years, but could result in the loss of 700,000 jobs, according to a recent parliamentary study. But defenders of the measure say threats of layoffs are both improbable and unnecessary.
“California has created 142,000 jobs in the fast food sector since the minimum wage began to increase in 2015
,” recalls Tia Koonse.
Some fast-food workers are already paid more than $20 an hour in California's most expensive cities, she says. And the industry's big names have posted record profits since 2018, fueled by the pandemic.
“Surely instead of laying people off, they could share some of these profits with the poorest workers in California
,” she concludes.