In a significant development, a new bill in California aims to increase the minimum wage for the majority of the state’s 500,000 fast-food workers to $20 per hour by the next year. This legislative initiative seeks to resolve an ongoing dispute between labor unions and the fast-food industry concerning compensation and working conditions.
The proposed modifications to Assembly Bill 1228 specifically target fast-food workers employed at establishments with a national presence of at least 60 locations. Notably, this legislation excludes restaurants engaged in the production and sale of their own bread, with Panera Bread being a prime example. Currently, California’s fast-food employees earn wages approximately in line with the state’s minimum wage of $15.50 per hour.
According to the Service Employees International Union (SEIU), which represents fast-food workers, both fast-food companies and their employees have already given their approval to the proposed wage increase. Introduced earlier this year by Democratic Assemblymember Chris Holden of Pasadena, this bill must now navigate the legislative process and ultimately secure the signature of Governor Gavin Newsom to become law.
Ingrid Vilorio, a fast-food worker and SEIU member, emphasized the long-standing struggle of California’s fast-food cooks, cashiers, and baristas against poverty-level pay and unsafe working conditions. Vilorio stated, “We have always known that to solve these problems, we need a seat at the table with our employers and the power to help shape better rules across our industry.”
Mary Kay Henry, international president of the SEIU, lauded the efforts of fast-food employees in California, highlighting how they are influencing state policies for the betterment of their futures. She remarked, “I think fast-food cooks and cashiers have fundamentally changed the politics of wages in this country and have reshaped what working people believe is possible when they join together and take on corporate power and systemic racism.”
The proposed $20 hourly wage is regarded as a starting point, with union members expressing the intention to further enhance worker compensation. If the bill is enacted, it will establish a nine-member Fast Food Council comprised of representatives from the restaurant industry and its labor force. This council will possess the authority to annually increase the minimum wage by a maximum of 3.5% or the change in the U.S. consumer price index for urban wage earners and clerical workers, whichever is lower.
Economist Sung Won Sohn from Loyola Marymount University pointed out that raising the minimum wage can have both positive and negative consequences for the economy. While it tends to elevate salaries in various sectors, benefiting a wide range of workers, it can also contribute to inflation, resulting in higher prices for goods and services across the board.
While uncommon, it is not unprecedented for states to establish industry-specific minimum wage standards. Minnesota, for instance, formed a council to determine wages for nursing home workers, and in 2021, Colorado introduced a $15 minimum wage for direct care workers in home and community-based services.