California fast food workers will begin making $20/hour

Starting Monday, fast-food workers in California will see their minimum wage rise from $16 to $20 an hour, a 25% increase for many, impacting chains like McDonald’s, Chipotle, Starbucks, In-N-Out, Subway and Pizza Hut.

An estimated 500,000 fast-food workers will benefit from the pay raise. It is a significant victory for those in low-paying jobs, particularly women, immigrants, and people of color, who often struggle to make ends meet in one of America’s most expensive states.

While workers welcome the news, concerns about its impact on local businesses persist. Some franchise owners warn of price hikes, reduced hours, job cuts, or closures to cope with higher labor costs. Pizza Hut said it plans to lay off more than 1,000 delivery drivers due to the wage hike.

Fast-food executives anticipate price increases of 2.5% to 3.5%, with some planning to accelerate automation to offset wage expenses. Chipotle is already testing its “Autocado” guacamole-making robot.

But 
Research suggests that past wage increases, like Seattle’s $15 minimum wage, led to reduced hours for workers but did not significantly affect the overall level of employment.

Overall, the wage increase reflects ongoing efforts to address income inequality, setting a precedent that could influence similar policies nationwide.