California Fast Food Workers Celebrate Wage Hike

Fast food workers in California hailed a pay raise that takes their minimum wage to $20 an hour, even as firms warned of likely price increases in an already expensive state.

More than half a million people in California are employed in the fast food sector, at globally familiar chains like Burger King and Taco Bell, but also at smaller homegrown brands like In-N-Out Burger.

The California legislation, signed into law last year by Democratic Governor Gavin Newsom, applies only to establishments with little or no table service and that have at least 60 sites nationwide.

Some chains have said they will need to increase prices and warn the wage hikes could ultimately cost jobs.

"Everyone is going to have to pay more," said Jack Hartung, chief financial officer of Chipotle Mexican Grill, according to the Wall Street Journal.

Chipotle, which is headquartered in California, has already raised its prices four times in the last two years, and says it is considering further increases of up to nine percent to cover wage costs.

Economists are divided on the effects of the minimum wage, which is set at $7.25 federally, though it varies widely by state.

A recent Congressional Budget Office study found raising the federal minimum to $17 an hour could help 18 million people over the next five years, but could cost 700,000 jobs.

UCLA's Koonse argued that layoffs in California were both unlikely and unnecessary.

"California has added 142,000 jobs to the fast food industry since the minimum wage started going up in 2015," she said.

Outlets in some of the state's more expensive cities are already paying staff upwards of $20 an hour, either because of local rules or market forces, she said, adding the industry's big names have experienced record profits since 2018, further fueled by the pandemic.