Good news for fast-food workers, as Gov. Gavin Newsom recently signed a bill to raise the minimum wage for these employees to $20, marking the nation’s highest minimum wage, according to apnews.com. The bill was signed on Sept. 30 and will come into effect in April of 2024. The new law will be implemented throughout all California large fast-food chains (there must be at least 60 locations nationwide), according to gov.ca.gov.
Dr. Adele Harrison, professor of finance, commented that this law takes away the power of the corporation to decide wages based on their business model. While she expressed the importance of allowing existing fast-food workers a more sustainable income, she noted that raising the wages of newly hired fast-food employees is bound to create a chain reaction.
“So if I’m paying my person in the back that’s frying the burgers $20 an hour, then what am I going to have to pay the manager, the shift manager, and then the store manager? So every time you raise the wage for the lowest level on the rung, you effectively raise the rates for everybody,” Harrison said.
Preston Thompson, junior civil engineering major and Provider employee, agreed that this hourly rate is similar to what managers receive.
“Making $20 [at fast food] would be better than working jobs like retail or anything that pays minimum wage,” Thompson said. “Your payroll is pretty much like a manager’s pay.”
Michael Meenan, senior software engineering major and supervisor at Provider, shared the same sentiment. He stated that higher roles in fast food establishments should receive higher pay since they require more effort and responsibility.
“I would definitely advocate for my pay to increase as well as a supervisor,” Meenan said. “Having worked for four years to earn this title, I would still like to see my wage be higher than my other coworkers, who haven’t earned the position and proved themselves to be as strong as a supervisor.”
With the universal increase in employee wages, Harrison predicts that the price of fast-food items will do the same. If people need more money to work at these establishments, chains must implement changes to remain profitable.
“They might start offering smaller portion sizes,” Harrison said. “So maybe instead of a quarter-pound burger, it’s just under a quarter-pound burger. But they’re going to charge you the same amount.”
Another by-product of higher wages could be that chain restaurants will accelerate their integration of machinery instead of hiring more workers at a higher rate.
“They’ve already been experimenting with more automation,” Harrison said. “In other words, not even really having anybody at the front to take orders, you just use a kiosk. Now you’ve eliminated a worker after you’ve paid for that expense of the machinery.”
However, this change may be what restaurants need to bring in more employees. Since the COVID lockdown, fast-food restaurants have struggled with labor shortages nationwide.
“There’s been less interest in them [fast food jobs] recently because people feel that there’s other ways they can provide for themselves,” Harrison said. “An inducement to get them to come back to the job would be to increase the wage rate or other benefits.”
Harrison examined the dilemma from a Christian perspective, sharing how it relates to a skewed sense of morality that makes it challenging to regulate hourly rates for workers.
“Since you’re dealing with the fall of man, then that’s why the government comes in and tries to put parameters on behavior, because of the inclination to want the best for yourself. It’s really hard to make sure that happens and goes across the board,” Harrison said.
As April draws closer, Harrison hopes that chains will find a way to implement this new law to benefit both customers and employees.
“People just need to be prepared that things are only going to get more expensive over time,” Harrison said. “And so I would hope that they’re planning to budget appropriately.”