A new California legislation increased the hourly salary for fast food workers from $16 to $20 as of April 1. As a result, Lawrence Cheng, whose family owns seven Wendy’s outlets south of Los Angeles, has had to make adjustments to operations.
To deal with the rise in labor costs, Cheng now works more hours and schedules fewer staff per shift.
Although he currently only plans seven workers for the afternoon shift, Cheng’s Fountain Valley location in Orange County formerly had over a dozen. Basically, “we kind of just cut where we can,” Cheng explained. He is hoping that the increased volume of business throughout the summer will be enough to cover the additional expenses.
The long-term effects of the wage increase on fast-food chains are still being assessed by experts. Wage increases in the past may not have caused massive unemployment, according to the data. For example, research conducted by the University of California, Berkeley found that job growth persisted even after the minimum wage was raised to $15 per hour in New York and California.
According to the U.S. Bureau of Labor Statistics, the fast food business added 8,000 jobs in the first two months after the April 1 wage rise, compared to the same period in 2023. On the other hand, to stay afloat, some franchise operators have reported reducing hours and increasing rates.
A turkey sub goes for $11.15, up from less than $10, according to Juancarlos Chacon, who owns nine Jersey Mike’s restaurants in Los Angeles. He has also cut personnel. “I have been in the business for 25 years and never had to increase prices this much before,” said Chacon. About twenty part-time workers have also been let go by him.
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Employees’ take-home pay has gone up thanks to the wage increase. To spend more time with her son and still pay for necessities, Pizza Hut employee Julieta Garcia of Los Angeles reduced her workweek from six days to five.
Howard Lewis, a retiree who works at a Wendy’s in Sacramento, has helped out his ex-wife and invested his extra earnings.
Paying California’s fast food employees a decent wage has been a priority for Governor Gavin Newsom. “We are a state that gives a damn about fast food workers, who are predominantly women, working two and a half jobs to get by,” added Newsom.
The pay raise has both positive and negative aspects, according to some. Managing shifts with fewer staff is now second nature to Enif Somilleda, general manager of an Orange County Del Taco. Saying, “Financially it has helped me,” she continued. “But I have fewer people, so I have to do a lot more work.”
