About half a million workers at California fast food chains began receiving a $20-an-hour minimum wage, and the increase has some small business owners questioning their future, even as workers say the raise helps pay the bills.

California

California's fast food industry is currently experiencing a significant shift as approximately half a million workers employed by fast food chains have started to receive a minimum wage of $20 an hour. This adjustment has sparked diverse reactions within the sector. While the increase is seen positively by employees, stating it aids in covering their living expenses more efficiently, it has simultaneously triggered concerns among some small business owners. These proprietors are questioning the long-term viability of their enterprises in light of the wage hike.

The new wage policy directly impacts a substantial section of the workforce within the state's fast food industry. The raise to a $20-an-hour minimum wage marks a notable change in the compensation structure for employees. On the flip side, small business owners, particularly those who operate in the fast food domain, express apprehension about the sustainability of their businesses with the increased labor costs.



California fast food industry divided over pay hike

Around half a million workers at California fast food chains began receiving a $20 an hour minimum wage this week. That's up from the state's previous $16 minimum and applies to chains with 60 or more locations nationwide. While workers say the raise helps pay the bills, business owners like Brian Holm are worried about higher operating costs. He's already increased prices between 5 and 10 percent in response to the new minimum. And eventually, you know, as time goes on, if we're not making a profit we would have to close down. For seven years, he and his wife have owned two Vitality Bowl Superfood Cafe franchises in South San Jose. Between the two locations, they have about three dozen employees, which they say are mostly young adults in high school and college. California Governor Gavin Newsom said one goal of the pay bump passed last September was to make the state's economy more inclusive. 66-year-old Holm isn't so sure. It's kind of a catch-22, you know, where people want higher wages but at the same time the cost to run the business doesn't work out. Maybe corporate stores can, but most of the small stores are, you know, run by, you know, people of color, people that have immigrated, women, and, you know, seniors like me, right? I'm a senior and I'm trying to run a business for my family and, you know, if it goes down, then my family goes down, too. However, fast food workers like Ingrid Valorio have a brighter outlook on the wage bump. I think the new minimum wage somewhat alleviates the heavy cost of living in California. That's what this new salary does, ease the cost of living a little. Valorio has worked at Jack in the Box for four years. In that time, she has seen her employers cut hours and increase work, and now she says they're upset they have to pay their workers more. Each employee does the work of two or three people, and the saddest thing right now that we're experiencing as employees is that instead of the employer being happy about this increase, a minimal one for the worker. Instead, they're angry that they have to raise their employees' salaries. The economic bottom line of the hourly bump is not clear-cut. Some studies suggest a minimum wage hike can reduce hours in hiring, like the Vitality Bowl owner Hall mentioned, while others point to better outcomes for workers. And it also remains unclear how much pressure businesses not affected by the law will feel to raise their wages to match those that are.

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