Small-business owners brace for uncertainty as $20 hourly fast-food wage takes effect

Frank Shyong, Los Angeles Times on

Published in Business News

Justin Foronda is the type of creative, motivated, second-generation entrepreneur who should be able to thrive in Los Angeles.

Born and raised in Historic Filipinotown, Foronda opened Hifi Kitchen in 2019 and kept the doors open during the pandemic's economic disruptions through pure hustle.

Last year the 37-year-old staged a Filipino holiday market across street from Hifi to draw crowds to the neighborhood. He started a board game night at the store to bring in customers. Next weekend he's organized a panel of DJs and emcees to discuss the history of Filipinos in hip hop, and he's created drink and meal specials for each panelist.

He's also tried opening a gift shop, selling apparel, and doing desserts. He offers new specials almost every week. Foronda also works weekends as a nurse — and ends up floating the restaurant a lot of those earnings.

All that effort has earned him nearly 6,000 followers on Instagram and kept the restaurant open for five years — no small feat given the economic contortions of the last half decade. But with California's new minimum wage for fast-food workers taking effect this month, Foronda says he's starting to run out of gas.

He supports a higher minimum wage and tries to pay his employees generously. But the minimum wage is rising so fast that the increased compensation he planned to offer as a retention strategy quickly becomes the new minimum.


"It's like we're playing Mario Kart, and we're just always trying to make it to that boost," Foronda said.

Small-business owners across Los Angeles are facing a more expensive reality in which the pandemic's price disruptions have become permanent. Foronda said sometimes eggs are $40 a case, and sometimes they're $125. So what should he charge for an extra egg?

The new minimum wage is a valuable attempt to rectify the state's burgeoning income inequality. More money in the hands of fast-food workers — who are more likely to be women, immigrants and minorities — is a good thing.

Fast food is and always has been too cheap. The McDonald's dollar menu and 50-cent Jack in the Box tacos have become anachronisms in a world where an extra scoop of guacamole at Chipotle costs nearly $3. Fast-food companies have used their dominant position in the labor market to keep wages and prices excessively low, said Michael Reich, a labor economist and professor at UC Berkeley.


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