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Higher prices on the menu as fast-food chains brace for California's big minimum wage jump

Andrea Chang and Don Lee, Los Angeles Times on

Published in Business News

Shortly after Gov. Gavin Newsom signed the pay increase legislation into law in September, hundreds of Pizza Hut franchises in California moved to lay off more than 1,100 delivery drivers, federal and state filings show.

The affected Pizza Huts are run by franchise operators and located from Orange to Stanislaus counties, according to the California Employment Development Department. The layoffs were expected to go into effect in February.

Fast food is tightly woven into the history, cultural life and economic growth of Southern California.

Brothers Richard and Maurice McDonald opened a drive-in restaurant in Pasadena in 1937, a few years before starting the first McDonald’s in San Bernardino. Another pioneer, Carl Karcher, bought a hot dog cart in L.A. in 1941 and went on to found Carl’s Jr.

Taco Bell, In-N-Out Burger and Jack in the Box also come from the region.

Collectively, their explosive growth across the U.S. and sustained success over the decades symbolized the busy American life, the rise of the baby boomer generation and California’s love affair with cars.

 

Yet the industry has come to be seen as the stereotypical low-wage sector where millions of workers make minimum wage and toil under tough and sometimes unsafe conditions, making it a prime subject of the Fight for $15 movement and such books as “Fast Food Nation.”

The passage of AB 1228 represented a significant win for fast-food workers who for years have organized for better wages and protections. Along with the higher minimum, the new law established a Fast Food Council — composed of business and labor representatives — that has the authority to set future pay increases (at a maximum of 3.5% a year) and develop standards on working conditions and employee safety and training.

Employees at fast-food or limited-service restaurants nationwide work about 25 hours a week on average. Many face unpredictable hours with some called in on short notice or required to work split shifts — two separate periods in one day.

Angelica Hernandez, who works as a cook trainer at a McDonald’s in Monterey Park and was appointed to the Fast Food Council, called the $20 minimum wage “good progress.” But she worries that the restaurant will respond by slashing employee hours, which she said it has done in the past after increasing wages.

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