California’s fast-food industry is undergoing a major shift with the implementation of a new minimum wage law, set to increase hourly wages for fast-food employees to 20 dollars. This significant hike, amounting to a 25% raise from the previous rate of 16 dollars, has sparked debates and concerns among restaurant owners, franchisees, and consumers alike. The repercussions of this wage increase are rippling through the industry, and the outcome is going to be scary.
Fast-food employees in California will see their minimum wage increase to 20 dollars per hour, marking a significant 25% raise from the former 16 dollars rate. This change impacts major restaurant chains like McDonald’s, Pizza Hut, KFC, Subway, and Starbucks, with local franchisees expressing concerns about the resulting rise in labor costs.
Comparatively, the federal minimum wage remains at 7 dollars 25 cents per hour, unchanged since 2009. Restaurant owners and franchisees in California anticipate that the higher wages will compel them to raise prices, implement automation, reduce workers’ hours, or even close down operations.
The impact of these wage hikes is already evident, with Pizza Hut franchisees laying off numerous delivery drivers in anticipation of the increase and shifting towards delivery apps like Uber Eats and Door Dash, which pass additional fees onto customers. Major chains such as Jack in the Box, Starbucks, McDonald’s, and Chipotle are also planning price increases beyond what they’ve already implemented, contributing to the overall uptick in dining costs across the country.