The Blubber

California's workers now want $30 minimum wage.

This new law, aimed at addressing the financial struggles of fast food workers, many of whom are adults supporting families rather than teenagers earning extra money, was passed by Democrats in the state Legislature last year. This includes immigrants like Ingrid Vilorio, who started working at McDonald's shortly after arriving in the U.S. in 2019. Fast food was her full-time job until last year, and now she works about eight hours per week at Jack in the Box while holding other jobs.

"The $20 raise is great. I wish this would have come sooner," Vilorio said through a translator. "Because I would not have been looking for so many other jobs in different places."

The law received support from the trade association representing fast food franchise owners. However, since its passage, many franchise owners have expressed concerns about the law's impact, particularly during California's economic slowdown.

Alex Johnson, who owns 10 Auntie Anne's Pretzels and Cinnabon locations in the San Francisco Bay Area, said sales have slowed in 2024. This slowdown forced him to lay off his office staff and rely on his parents to help with payroll and human resources. Increasing his employees' wages will cost him about $470,000 each year. As a result, he will need to raise prices by 5% to 15% in his stores and is no longer hiring or looking to open new locations in California.

"I try to do right by my employees. I pay them as much as I can. But this law is really hitting our operations hard," Johnson said. "I have to consider selling and even closing my business. The profit margin has become too slim when you factor in all the other expenses that are also going up."

Over the past decade, California has doubled its minimum wage for most workers to $16 per hour. A major concern during this period was whether the increase would lead to job losses as employers faced higher expenses. However, data showed that wages went up without a corresponding decrease in employment, according to Michael Reich, a labor economics professor at the University of California-Berkeley.

"I was surprised at how little, or how difficult it was to find disemployment effects. If anything, we find positive employment effects," Reich said.