California is set to become the first state in the nation to guarantee a $20 minimum wage for most fast food workers, thanks to a deal reached between labor unions and the industry on Monday. The agreement, which will avoid a costly ballot measure fight in 2024, will benefit hundreds of thousands of workers who currently earn as low as $15.50 per hour.
The deal was announced by Democratic Gov. Gavin Newsom, who praised it as a “historic achievement” that will “lift up workers and families across the state.” He said the deal will also “protect public health and safety” by ensuring that fast food workers have access to paid sick leave, health care, and other benefits.
The deal applies to all fast-food restaurants in California that are part of a chain with at least 60 locations nationwide. It does not apply to restaurants that operate a bakery and sell bread as a stand-alone menu item, such as Panera Bread. The $20 wage will start on April 1, 2023, and a council will have the power to raise it each year through 2029.
Fast food workers in California to get $20 minimum wage:
The deal is the result of a compromise between labor unions and the fast food industry, which had been locked in a bitter dispute over a law passed last year that created a Fast Food Council with the authority to raise wages and set workplace standards for fast food workers.
The law was challenged by the industry, which gathered enough signatures to qualify a referendum on the law for the November 2024 election. That meant the law would be on hold until voters could decide whether to overturn it.
Labor unions, meanwhile, sponsored legislation this year that would have made fast food companies like McDonald’s liable for any labor violations committed by their mostly independent franchise operators. They also pushed for funding to revive the Industrial Welfare Commission, a state agency that has the power to set wage and workplace standards for multiple industries.
Both sides agreed to drop their respective measures in exchange for the $20 minimum wage deal, which they said was a win-win solution for workers and businesses. They said the deal will provide stability and certainty for the industry, while also improving the living standards and working conditions of fast food workers.
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Ingrid Vilorio, a fast-food worker at a Jack In The Box in the San Francisco Bay Area, said the increase in salary next year will bring some relief to her family, who until recently was sharing a house with two other families to afford rent. “A lot of us (in the fast-food industry) have to have two jobs to make ends meet, this will give us some breathing space,” said Vilorio, who also works as a nanny.
The deal was welcomed by advocates for low-wage workers, who said it will help reduce poverty and inequality in California. They said it will also boost consumer spending and economic growth, as well as reduce reliance on public assistance programs.
However, some critics argue that the deal will hurt small businesses and consumers, who will face higher costs and reduced choices. They said it would also create an unfair advantage for large chains over independent restaurants, which will not be subject to the same wage requirements.
The deal still needs to be approved by the state Legislature and signed by Newsom before it becomes law. The bill is expected to pass easily in the Democratic-controlled Legislature before the end of this month.