Lawrence Cheng, a Wendy’s franchise owner in Southern California, has had to adjust his staffing levels and prices in response to a recent California law that raised the minimum wage for fast food workers to $20 an hour. With labor costs increasing, Cheng has cut back on the number of employees scheduled for each shift, taking on extra work himself to make up the difference. As summer approaches, Cheng hopes that increased business will help cover the added expenses and improve profits. While some major fast food chains have noted job growth and better job candidates with the wage hike, others are cutting hours and raising prices to stay afloat.
Despite the wage increase being beneficial for some employees like Julieta Garcia and Howard Lewis, who can now afford necessities and investments, many businesses are feeling the financial strain. Aaron Allen, a restaurant consulting firm CEO, predicts that larger corporations may invest in automation to reduce costs, while smaller chains could face closures or significant reductions in stores. For Cheng, who manages 250 Wendy’s employees, the wage hike has forced him to cut overtime and raise menu prices, resulting in some financial challenges.
The impact of the wage hike on the fast food industry remains uncertain, with conflicting reports of job growth and cost-cutting measures. Gov. Gavin Newsom defended the increase as necessary to provide a living wage for fast food workers, particularly women who often work multiple jobs to get by. As businesses navigate the changes brought on by the new law, both workers and owners are experiencing the effects of the wage increase in different ways.
