Franchisees across California are adjusting by cutting employee hours in response to a new California law raising the minimum wage for fast food workers from $16 to $20 per hour.
In an AP News report, Lawrence Cheng, who owns seven Wendy's locations south of Los Angeles, has already changed his staffing.
Previously, he scheduled nearly a dozen employees for each afternoon shift at his Fountain Valley location in Orange County. After the wage hike, he's only looking to schedule seven. He hopes that the busy summer season will help offset the increased labor costs.
However, experts suggest it's too early to determine the long-term effects of the wage hike on the industry, noting that previous wage increases in states like California and New York did not necessarily lead to job losses.
Franchisees Respond to California Wage Hike
Like Cheng, several franchise operators are concerned.
Talking to AP News, Juancarlos Chacon, who owns nine Jersey Mike's locations in Los Angeles, has had to cut back on staffing and increase prices.
Chacon remarked that his turkey sub, which used to cost under $10, now costs $11.15.
Although customers are still coming in, they spend less, opting out of drinks, chips, and desserts.
How Californian Fast Food Workers React to $20/Hour Wage Hike
Unlike franchisees, wage increases have received positive sentiment from fast food workers.
An employee at Pizza Hut in Los Angeles now works five days a week instead of six, allowing her more time with her 4-year-old son. The additional income has helped her manage bills and healthcare for her child.
Meanwhile, a retiree working at Wendy's in Sacramento has invested his extra earnings and helped his ex-wife with car repairs.
While the higher wage financially relieves some employees, a general manager at a Del Taco in Orange County faces increased workloads due to reduced staffing.
Governor Gavin Newsom defended the wage hike, emphasizing the need to provide a living wage for the state's fast food workers, many of whom are women juggling multiple jobs.
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