California fast food workers now earn $20 per hour. Franchisees are responding by cutting hours.
What prompted the wage increase for California fast food workers?
The wage increase for California fast food workers was prompted by the signing of California Assembly Bill 1287 into law by Gov2. Gavin Newsom. The bill established a $20 per hour minimum wage for fast-food workers and a fast-food regulatory council with the authority to raise the industry's minimum wage annually2.
How did Lawrence Cheng adjust his staffing in response to the wage hike?
Lawrence Cheng, who owns seven Wendy's locations, reduced his staffing to cope with the wage hike from $16 to $20 an hour. He cut overtime and reduced the number of workers on each shift. Instead of having nearly a dozen employees on the afternoon shift, he now schedules only seven.
What are the long-term predictions for fast food jobs after the wage increase?
Experts say it's still too early to tell the long-term impact of the wage hike on fast food restaurants and whether there will be widespread layoffs and closures. Past wage increases have not necessarily led to job losses. The industry has continued to show job growth, but many major fast food chain operators say they are cutting hours and raising prices to stay in business.