California fast food workers now earn $20 per hour. Franchisees are responding by cutting hours.
When California’s minimum wage increase went into effect in April, fast food workers across the state went from making $16 to $20 overnight
LOS ANGELES — Lawrence Cheng, whose family owns seven Wendy’s locations south of Los Angeles, took orders at the register on a recent day and emptied steaming hot baskets of French fries and chicken nuggets, salting them with a flourish.
Cheng used to have nearly a dozen employees on the afternoon shift at his Fountain Valley location in Orange County. Now he only schedules seven for each shift as he scrambles to absorb a dramatic jump in labor costs after a new California law boosted the hourly wage for fast food workers on April 1 from $16 to $20 an hour.
“We kind of just cut where we can,” he said. “I schedule one less person, and then I come in for that time that I didn’t schedule and I work that hour.”
Cheng hopes the summer when business is traditionally brisk with students out of school and families traveling or spending more time eating out will bring a better profit that can cover the added costs.
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. When California and New York nearly doubled their minimum wage previously to $15 compared to the federal level of $7.25 per hour, job growth continued, according to a University of California, Berkeley study.
So far, the industry has continued to show job growth. In the first two months after the law passed April 1, the industry gained 8,000 jobs, compared to the same period in 2023, according to the U.S. Bureau of Labor Statistics. No figures were available yet
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