LOS ANGELES, Calif.: Lawrence Cheng, whose family owns seven Wendy’s locations in South Los Angeles, has had to adjust his operations because of a new California law that increased the hourly wage for fast-food workers from $16 to $20 starting April 1.
Cheng now employs fewer workers per shift to cope with rising labor costs and is working overtime himself.
Cheng used to have about a dozen afternoon employees at his Fountain Valley, Orange County, location, but now he has just seven. “We’re cutting back where we can,” Cheng says. He hopes the typically higher volume of business during the summer will help cover the extra costs.
Experts are still evaluating the long-term impact of rising wages on fast food. Historical data suggests that past wage increases have not necessarily led to massive job losses. For example, when California and New York raised their minimum wages to $15 an hour, job growth continued, according to a University of California, Berkeley study.
According to the U.S. Bureau of Labor Statistics, in the first two months after the April 1 wage increase, the fast-food industry gained 8,000 jobs compared to the same period in 2023. However, some franchise operators say they have reduced hours and raised prices to remain viable.
Juancarlos Chacon, owner of nine Jersey Mike’s restaurants in Los Angeles, has cut staff and raised prices, noting that a turkey sandwich now costs $11.15, up from less than $10. “I’ve been in the business 25 years and I’ve never had to raise prices this much before,” Chacon said. He also laid off about 20 part-time employees.
The wage increase has allowed workers to increase their income. Julieta Garcia, a Pizza Hut employee in Los Angeles, now works five days a week instead of six, allowing her to spend more time with her son and cover essential expenses.
Howard Lewis, a retiree who works at a Wendy’s in Sacramento, invested his extra income and helped his ex-wife.
Gov. Gavin Newsom stressed the importance of raising wages to ensure a living wage for the state’s fast food workers. “We are a state that cares about fast food workers, who are predominantly women, who work two and a half jobs to survive,” Newsom said.
For some, the pay increase is a double-edged sword. Enif Somilleda, general manager of a Del Taco in Orange County, is now managing shifts with fewer employees. “Financially, it’s helped me,” she said. “But I have fewer people, so I have to work a lot more.”
