Econometer: Should the minimum wage for fast food workers be raised?

Roxana Popescu, The Mercury News on

Published in Business News

Most of California's estimated 500,000 fast-food workers would get a $20 minimum wage in 2024 — almost $5 an hour more than the current state minimum wage of $15.50 — if a compromise bill is signed into law by Gov. Newsom. The raise would be lower than a $22 minimum wage that could have been authorized by a Fast Food Council.

Restaurant groups were preparing to challenge the creation of the council in a 2024 referendum. The agreement is also the product of concessions from labor, including an agreement to not hold fast food companies liable for violations by franchise operators. Health care workers are also set to get a raise next year after a deal between labor and industry.

Speaking of the fast-food wage compromise, Sean Kennedy, executive vice president for public affairs for the National Restaurant Association, said, "This agreement protects local restaurant owners from significant threats that would have made it difficult to continue to operate in California."

Joseph Bryant, executive vice president of the Service Employees International Union, said the new compromise bill gives the state "an opportunity to reaffirm our commitment to getting fast-food workers a seat at the table to make decisions about standards guiding their pay, training and working conditions."

Raising the minimum wage for select industries can have ripple effects, boosting the economic welfare of select low-income workers while also leading to raises in other industries and, more broadly, potential price inflation.

Q. Should the minimum wage for fast-food restaurant workers be raised to $20 in 2024?


Norm Miller, University of San Diego

NO: While feasible for many restaurants, as the average pay is over $18/hour already, and $20 is a small increment from where we should be in 2024, a few restaurants will struggle. Some workers will be better off with a higher minimum wage. Others will be replaced by more automation and customer self-service. I'd prefer we let the market determine wages, except for vulnerable laborers like crop pickers, but if this passes, it won't have much impact.

Lynn Reaser, economist

YES: The $20 wage compromise shows democracy working with the compromise reached between labor and industry. The saga began with the passage of AB 257, which established a council that could have boosted wages to $22 by 2024. The industry launched a referendum attempt to repeal the law and defund the council. The battle went back and forth and has ended without a costly referendum and with a new council representing multiple interests.


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