Fast food workers and their supporters march in front of the California State Capitol in Sacramento, California, August 16, 2022. (AP Photo/Rich Pedroncelli, File)

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Specific industries Economic and social impact

SACRAMENTO, Calif. — Most fast-food workers in California will be paid at least $20 an hour next year under a new bill introduced by the state Legislature aimed at end the impasse between industry and unions over wages and working conditions.

California’s minimum wage is already among the highest in the country, at $15.50 an hour. The bill, introduced Monday with the blessing of unions and the fast food industry, would raise the minimum wage to $20 an hour for workers at California restaurants with at least 60 locations nationwide – with the exception of restaurants that manufacture and sell. their own bread, like Panera Bread.

The bill will affect about 500,000 fast food workers in California, according to the Service Employees International Union, which is working to organize fast food workers in the state. Among them is Ingrid Vilorio, who works at a Jack In The Box in the San Francisco Bay Area. She said the increase would help her family, who until recently shared a house with two other families to be able to pay their rent.

“A lot of us (in the fast food industry) have to work two jobs to make ends meet, so this will give us some relief,” said Vilorio, who also works as a nanny.

The bill is the first of what could be multiple victories for unions in the California Legislature this year, on the heels of high-profile strikes in the entertainment and hospitality industries that some have called “hot summer of work”.

The State Assembly on Monday voted to approve a proposal to provide unemployment benefits to striking workers — a policy change that could potentially benefit Hollywood actors and writers and area hotel workers from Los Angeles who have been on strike for much of this year.

And health care workers are pushing for a $25 minimum wage in a bill that could come to a vote before the state Legislature adjourns Thursday.

Specific industries

“For us, the big win here is being able to sit at the table with employers,” said Mary Kay Henry, international president of the Service Employees International Union. “We think the lesson here is that large U.S. companies that operate globally can sit down and think with workers about issues common to their industry. »

It is unusual, but not unprecedented, for states to have a minimum wage for specific industries. Minnesota lawmakers created a board to set wages for nursing home workers. In 2021, Colorado announced a $15 minimum wage for direct care workers in home and community-based services.

In California, most fast-food workers are over 18 and are primary breadwinners, according to Enrique Lopezlira, director of the low-wage work program at the University of California, Berkeley, Labor Center.

Raising the minimum wage can both benefit and harm the economy, according to Sung Won Sohn, an economist at Loyola Marymount University. He said that whenever wages rise in one sector, it tends to raise wages in other sectors as well, meaning many more workers will benefit. But higher wages generally mean higher inflation, which raises the price of goods for everyone. Sohn said he estimates that about two-thirds of the consumer price index — a measure of changes in prices of goods and services — can be explained by labor costs.

“From a purely economic point of view, the consequences are quite clear,” Sohn said. “From a social perspective, a lot of workers in low-wage jobs really need it.”

The unique structure of the fast food industry – with independent owners operating franchises under the umbrella of larger corporations – makes it difficult for governments to regulate and unionize to organize. Last year, California’s Democratic governor, Gavin Newsom, signed a law creating a Fast Food Council with the power to raise wages and set labor standards for the fast food industry.

Before the law could take effect, the fast food industry gathered enough signatures to qualify a referendum on the law in the November 2024 election. This meant the law would be suspended until voters could decide whether to cancel it or not.

Furious, unions responded this year by sponsoring legislation that makes fast-food companies like McDonald’s liable for any wrongdoing by their mostly independent franchisees in the state. Democratic lawmakers also restored funding for the Industrial Welfare Commission, a long-dormant state agency that has the power to set wages and labor standards for several industries.

Both measures alarmed business groups. They agreed to withdraw their referendum and raise the minimum wage in exchange for the unions abandoning both issues.

“This agreement protects local restaurateurs from significant threats that would have made it difficult to continue doing business in California,” said Sean Kennedy, executive vice president of public affairs for the National Restaurant Association.

The bill still must be approved by the Democratic-controlled state Legislature and signed into law by Newsom. If passed and signed, the bill could only go into effect if the restaurant groups remove their referendum from the ballot. In the past, a referendum could not be removed from the ballot, but Newsom signed a law last week allowing it.

The $20 hourly wage would be a starting point. The nine-member Fast Food Council, which would include representatives from the restaurant industry and labor unions, would have the power to increase that minimum wage each year by up to 3.5 percent or the change in US consumer price index for urban wage earners and office workers. workers, whichever is lower.

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