$20 Fast Food Minimum Wage in California
Starting today in California the minimum wage for fast food workers is $20/hour. No, that's not an April Fool's joke. It's a result of AB 1228, which the California legislature passed last year and Governor Gavin Newsom signed into law on September 28, 2023. The law took effect today, April 1, 2024.
$20 may seem an eye-popping wage to some, especially as a minimum wage. Indeed it dwarfs the US federal minimum wage, a paltry $7.25 last raised in 2009 (source: US Dept. of Labor). But the California minimum wage is already $16/hour state-wide- and many high cost-cities have even higher rates. Here in Sunnyvale it's $18.55/hour. In neighboring Mountain View it's $18.75.
I'm a big believer in worker rights, living wages, and raising minimum wages in general... but this law has a number of particulars that set off alarms with my good governance sense.
For one, this $20/hour minimum is too steep for fast-food employers state-wide. It's not out of line here in prosperous Silicon Valley, or in other HCOL areas like San Francisco, Oakland, Los Angeles, etc., but what about the many rural counties and small towns in California? Not every local economy can support this pay.
The degree to which this law targets a small number of employers really offends my sense of good governance. It applies to just one sub-industry, fast food- not even all restaurants or food service work, but fast food in particular. Moreover it contains so many exceptions that it really does seem to be targeting a relatively small set of political disfavored companies. Governor Newsom isn't even coy about that. He touts it as the intent.
The targeted companies are big, "wealthy" fast food chains. Normally when lawmakers want to target chains with rules while favoring small, "mom and pop" businesses they write laws with thresholds on the number of employees. For example, a variety of laws apply only to businesses employing at least, say, 50 employees. But this law applies based on the size of the chain. Only restaurants belonging to a chain with at least 60 locations nationwide are affected.
The law also provides a bakery carve-out that reeks of favoritism. If a chain restaurants sells bread as a stand-alone item, and bakes that bread itself, even if it also sells bread as part of a meal (like a sandwich), it's exempt from the law. Who does that exempt? Basically just one chain, Panera. And billionaire Greg Flynn, who owns 24 Panera franchises in California, is a buddy of Governor Newsom and donated to his campaigns. For the record, Flynn and Newsom both deny there's any favoritism there. But further adding to the sense of backroom dealing is the fact that the legislative deliberations that yielded this compromise are secret under binding NDAs. Though subsequent to a firestorm of media scrutiny Flynn offered to pay $20 at all of his restaurants. (Example news coverage: CNN.com article, 5 Mar 2024; Associated Press article, 11 Mar 2024)
$20 may seem an eye-popping wage to some, especially as a minimum wage. Indeed it dwarfs the US federal minimum wage, a paltry $7.25 last raised in 2009 (source: US Dept. of Labor). But the California minimum wage is already $16/hour state-wide- and many high cost-cities have even higher rates. Here in Sunnyvale it's $18.55/hour. In neighboring Mountain View it's $18.75.
I'm a big believer in worker rights, living wages, and raising minimum wages in general... but this law has a number of particulars that set off alarms with my good governance sense.
For one, this $20/hour minimum is too steep for fast-food employers state-wide. It's not out of line here in prosperous Silicon Valley, or in other HCOL areas like San Francisco, Oakland, Los Angeles, etc., but what about the many rural counties and small towns in California? Not every local economy can support this pay.
The degree to which this law targets a small number of employers really offends my sense of good governance. It applies to just one sub-industry, fast food- not even all restaurants or food service work, but fast food in particular. Moreover it contains so many exceptions that it really does seem to be targeting a relatively small set of political disfavored companies. Governor Newsom isn't even coy about that. He touts it as the intent.
The targeted companies are big, "wealthy" fast food chains. Normally when lawmakers want to target chains with rules while favoring small, "mom and pop" businesses they write laws with thresholds on the number of employees. For example, a variety of laws apply only to businesses employing at least, say, 50 employees. But this law applies based on the size of the chain. Only restaurants belonging to a chain with at least 60 locations nationwide are affected.
The law also provides a bakery carve-out that reeks of favoritism. If a chain restaurants sells bread as a stand-alone item, and bakes that bread itself, even if it also sells bread as part of a meal (like a sandwich), it's exempt from the law. Who does that exempt? Basically just one chain, Panera. And billionaire Greg Flynn, who owns 24 Panera franchises in California, is a buddy of Governor Newsom and donated to his campaigns. For the record, Flynn and Newsom both deny there's any favoritism there. But further adding to the sense of backroom dealing is the fact that the legislative deliberations that yielded this compromise are secret under binding NDAs. Though subsequent to a firestorm of media scrutiny Flynn offered to pay $20 at all of his restaurants. (Example news coverage: CNN.com article, 5 Mar 2024; Associated Press article, 11 Mar 2024)