California recently passed a law that established a new fast food industry specific minimum wage. The law is set to officially go into effect as of April 1st. The new minimum wage for qualifying fast food workers will go up to $20, one of the highest minimum wages in the entire country. The current minimum wage in the state, which has thus far applied to fast food workers as well, is $16. Annually, the wage has increased incrementally until reaching this $16 standard, allowing businesses to slowly build up to the new standard. However, with this steep jump, many businesses are being left to scramble and this new law that was set to help employees may end up harming more than expected.
Many businesses are expected to lay off many employees starting next week when the law takes effect.
Ever since the bill was introduced, debate has been constant with back and forth arguments from supporters and opposers. Supporters continue to argue that the compensation is needed for the fast food industry as they are notoriously an overworked and underpaid body of low-wage workers. Especially with the COVID-19 pandemic, many workers in the fast food industry faced high risk, as they were one industry that was not severely interrupted with shutdowns. When many stopped working in person and stayed home more, fast food workers were still in the kitchen preparing food for the masses. However, opposers think the wage increase is just going to raise food prices, lead to job losses, and even put some businesses at risk of closing.
The thing to consider is that the wage increase only applies to certain businesses.
Per the law’s definition of fast food restaurant, the business must be a brand or chain with 60 or more locations nationwide. The locations must each additionally consistently provide food and/or beverages for immediate consumption, to people who order and pay prior to eating. Furthermore, the food must include food that has been sold or prepared in advance, for example cooked in bulk and then kept hot for consumption. This means that small businesses, who would be the most likely to be harmed by the law, will not be affected by the wage change. They are still encouraged to do so, but if they are not able to, they are able to keep their wages as low as $16. The companies that would be affected are the major corporations such as McDonald’s and Burger King.
