California is giving fast food workers a boost. A new $20 minimum wage went into effect for California fast food workers in April 2024. According to the California Department of Industrial Relations, the new bill also establishes a Fast Food Council which “is empowered both to make future increases to the minimum wage and to adopt other minimum employment standards for fast food restaurants.”
Who Is Covered?
In order to be covered by the rule, the fast-food establishment must meet certain criteria. First, the restaurant must have “limited or no table service;” second, the restaurant must be part of a chain of at least “60 establishments nationwide;” finally, the restaurant must sell food intended for immediate consumption.
There are certain establishments excluded –namely, ones that “operate a bakery that ‘produces’ and sells ‘bread’ as a stand-alone menu item…” This provision caused controversy because it seemed to a campaign donor to Gov. Gavin Newsom who “owns and operates 24 Panera Bread restaurants in California.” The owner, Greg Flynn, clarified that Panera Bread will pay their employees $20 an hour under the new law.
The Economic Impact
The workers who staff fast-food restaurants will feel the benefit the most. NPR reported increased wages will help one worker take care of her grandchildren. Another said she will able to afford more bills, and will have less anxiety about how to pay for them, according to Reuters.
The economic reality, though, isn’t all sunny. Joel Griffith, Research Fellow in the Thomas A. Roe Institute for economic policy studies at The Heritage Foundation, told Drew Mariani that raising the minimum wage can do more harm than good. He noted that when the Congressional Budget Office studied raising the federal minimum wage to $15 an hour, it “would actually result in three people losing their jobs for every two people lifted out of poverty.”
According to Cato Institute scholar Ryan Bourne, minimum wage hikes negatively impact “teens, young adults, and less educated workers.” In other words, the hikes might hurt the very people they’re trying to help. Wage hikes can also have adverse effects on workers. Scott Lincicome, scholar at the Cato Institute explained even if employment status isn’t affected by wage hikes, workers might see “reduced hours…and harsher working conditions.”
The new law has had a negative effect on some restaurants. One fast food owner reported having to raise prices and cut hours for his employees, which resulted in a decline in traffic. Griffith explained that fast food companies have some of the smallest profit margins of businesses in the country, so raising labor costs will result either in raising food prices or laying off workers.
Catholic Church
The Catholic Church teaches about the importance of a family wage, or “a wage sufficient to maintain a family and allow it to live decently,” according to the Compendium of the Social Doctrine of the Catholic Church. However, the Church recognizes there are many ways of providing for such a wage, including “family subsidies and other contributions for dependent family members, and also remuneration for the domestic work done in the home by one of the parents.”
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