Fast Food Strikers - © AP

New Law Gives California Fast Food Workers Huge Pay Boost

Fast Food workers everywhere have been complaining about their wages for years. Some have even gone on strike against such industry giants as McDonald’s with varying degrees of success. Now, California has passed a big boost…

Happy Fast Food Worker - © Koshij via PintrestA happy Fast Food worker: May be making as much as $22.00 an hour starting next January…

Fast Food worker wages in California currently average $8.80 an hour, or $18,101.00 per year. But that could rise to as much as $22.00 an hour starting next year if legislation recently passed by the CA legislature becomes law. It’s on the Governor’s desk now awaiting his signature. He has about a month to sign.

In addition, leading recruiting company ZipRecruiter also notes: “[T]he FAST FOOD Restaurant job market in California is not very active as few companies are currently hiring. […] California ranks number 25 out of 50 states nationwide for FAST FOOD Restaurant job salaries.”

But that’s just the start

The Fast Act (Fast Food Accountability and Standards Recovery Act) would also see the creation of a 10-member council to keep tabs on the situation, with the power to raise Fast Food wages as much as 3.5 percent more per year thereafter.

California’s current overall official minimum wage is $15.00 an hour and will rise to 15.50 next January.

Caught in the middle

Governor Gavin Newsom is caught in the middle between the workers (who are understandably happy), and the fast Food companies and their customers, who stand to get hit with substantial cost/price increases.

Industry spokespeople and observers rose up and screamed blue murder when the overall minimum went up to $15.00 an hour. But California was just one regional or national government to make such a move a couple of years ago. At that time, some workers were happy while others wanted the Fast Food base wage raised even higher (see photo, top of page).

Of course, increases would have to be passed on, down the line. Fast Food franchisees warned they would go out of business, causing massive unemployment at the lowest level of the job market. They couldn’t see their customers paying as much as $12.00 for a Big Mac or a Whopper. But it didn’t exactly some to that. Competition came into play, franchise owners cut their profit margins even thinner, and chain head offices pitched in with support.

According to The Wall Street Journal, Major quick-service brands Chick-fil-A, Jack in the Box, Chipotle, Burger King, Chipotle, and In-N-Out spent more than $1 million in lobbying efforts against the current bill. And The International Franchise Association has spent $615,000 in opposition.

A new day dawning for the big chains

And let’s not forget that COVID gave the chains a taste of the future. That led to major business model revamps over the past couple of years and a cascade of announcements of more-automated, shorter-staffed, more delivery- and more-drive-thru oriented store concepts. Human staff, particularly, are being de-emphasized in the new regimes, which are projected to save big money for the brands.

Ready for a shocking rise in menu prices?

Near as I can tell, the average price for a Big Mac may have to rise to as much as $15.00 with the new minimum Fast Food worker wage comes into effect in California. Other old favourite menu items, of course, would bump in price in proportion.

But robotics and staff cuts and other measures to make menu item prep and delivery more efficient may be enough to stabilize menu prices and keep the Fast Food Sector competitive. We’ll have to wait and see…

~ Maggie J.