The new wage takes effect April 1st and will apply to fast food restaurants with at least 60 locations nationwide, with an exception for restaurants that make and sell their own bread, like Panera Bread.
"Fast food workers in CA will now be paid the highest minimum wage of any state in the country," Governor Gavin Newsom (D-California) boasted on social media last week. "I just signed a bill that will ensure these workers receive the fair pay they deserve."
The law also creates a Fast Food Council that has the power to increase that wage each year through 2029 by 3.5% or the change in averages for the U.S. Consumer Price Index for urban wage earners and clerical workers, whichever is lower.
As costs will ultimately be passed on to the customers, Steven Greenhut, director of the western region for the R Street Institute, predicts folks will opt to eat out less and less. So in the long run, he does not think this will work out for fast food workers.
"A lot of those people aren't going to be making $20 an hour; they're not going to have jobs," he warns.
Greenhut also expects more kiosks and other forms of automation will replace workers – a trend that started several years ago due in part to rising labor costs.
"These aren't generally meant to be life-long jobs, career jobs, so it's going to rob a lot of young people of the opportunity to get work experience because the wage is just so high," Greenhut says.
Meanwhile, the state's minimum wage for all other workers will remain at $15.50 an hour, which is already among the highest rates in the country. That took effect January 1, 2023.
Greenhut says it is just a matter of time before people and politicians push for higher minimum wages in those industries.
