California's fast-food workers will see a wage boost to $20 per hour due to a legislation signed into law by Gov. Gavin Newsom on Thursday.
The wage increase will be effective from April 1, 2024. It will apply to all employees who work at restaurants that have at least 60 locations across the country. However, restaurants that make and sell their own bread don't have to abide by the new minimum wage.
Assemblymember Chris R. Holden (D-Pasadena) sponsored the bill, AB 1228. It allows the Fast Food Council to establish the minimum wage for fast-food restaurants, and suggest guidelines for other aspects like health and safety standards, and training.
The wage increase makes California the state with the highest guaranteed base salary in the fast-food industry.
The average hourly wage for fast-food workers in California in 2022 was $16.21. Currently, they earn an average of $16.60 per hour, or just over $34,000 per year, according to the U.S. Bureau of Labor Statistics.
This figure is below the California Poverty Measure for a family of four—a statistic calculated by the Public Policy Institute of California and the Stanford Center on Poverty and Equality that accounts for housing costs and publicly-funded benefits.
California's minimum wage for all other non-fast food workers already earn one of the country's highest minimum wages at $15.50 per hour.
"California is home to more than 500,000 fast-food workers who—for decades—have been fighting for higher wages and better working conditions," Mr. Newsom, a Democrat, said in a statement Thursday.
"Today, we take one step closer to fairer wages, safer and healthier working conditions, and better training by giving hardworking fast-food workers a stronger voice and seat at the table.”
At an event in Los Angeles, Mr. Newsom dismissed the popular view that fast-food jobs are meant for teenagers to have their first experience in the workforce.
“That’s a romanticized version of a world that doesn’t exist,” he said.
“We have the opportunity to reward that contribution, reward that sacrifice and stabilize an industry.”
A "Now hiring" sign is displayed on the window of an IN-N-OUT fast-food restaurant in Encinitas, Calif., U.S., May 9, 2022. (Mike Blake/Reuters)
The law sets up a council to review and consider annual wage hikes until 2029, based on either a 3.5 percent increase or the U.S. Consumer Price Index's average change for urban and clerical workers, whichever is less.
Mr. Newsom's signature highlights the influence of labor unions in California, which have been trying to get fast food workers higher pay.
The move also settles a conflict between labor unions and fast food businesses about how to regulate the industry. The deal they reached means that in return for better wages, labor unions won't try to blame fast food brands for any wrongdoings by their independent franchise operators in California. In turn, fast food businesses agreed not to bring the worker wage issue up for a referendum in 2024.
“That was a tectonic plate that had to be moved,” Mr. Newsom said, referring to what he said were the more than 100 hours of negotiations it took to reach an agreement on the bills in the final weeks of the state legislative session.
Mary Kay Henry, the head of the Service Employees International Union International, said the new law reflects a decade of efforts, including some 450 strikes across the state over the past two years.
California politicians are now focusing on other sectors and have recently passed a bill to progressively raise the minimum wage for healthcare workers to $25 per hour.
The federal minimum wage in other sectors has been unchanged at $7.25 an hour since 2009, which is equivalent to $15,080 a year for a person who works 40 hours a week.