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Half a million California fast food workers will now earn $20 per hour

By Natasha Chen, CNN

(CNN) — As of Monday, about half a million fast food workers in California are making at least $20 per hour, $4 higher than the overall state minimum wage.

The new rate applies to restaurant chains with more than 60 nationwide locations and is a result of a years-long fight by workers to establish better wages and working conditions, specifically in California’s fast-food industry.

The law also creates a fast-food council, a first of its kind in the US, with representatives from both the restaurant industry and workers, who can increase the wage annually for the rest of the decade, in pace with inflation or up to 3.5%, whichever is higher. This council can also recommend standards for fast-food worker safety and work with existing state agencies to investigate issues like wage theft.

“I definitely think it’s a very big deal,” said Jaylene Loubet, who works as a McDonald’s cashier. “What we’re fighting for is not unreasonable. We’re just asking for what’s fair.”

But owners of some fast food franchise locations say in anticipation of this extra cost, they have already increased menu prices in the past few months, cut worker hours – or both. And many affected owners own only one restaurant location.

Michaela Mendelsohn, a franchisee who has been appointed to the new council, said, “There’s talk about showing both sides of this. I think it’s all one side. I think to be successful, we need to be successful, and our employees need to be successful together.”

Happy and expensive meal

Scott Rodrick started his first McDonald’s in the San Francisco Bay 30 years ago and now owns 18 locations.

Rodrick said overall, he has raised prices about 5% to 7% in the last three months to anticipate the higher wages.

“As a business owner, when you’re dealing with this kind of extraordinary overnight change, you know, a 25% increase in wages,… (no) stone has to remain unturned,” Rodrick said. “And so we have looked at price, although I can’t charge $20 for a Happy Meal. My customers appetite to absorb menu board prices is not unlimited.

Instead of cutting any worker hours, Rodrick said he would grow his delivery operations and make decisions about large capital expenses, like postponing updating a dining room or putting off buying new grills or rooftop HVACs.

“In the world of McDonald’s, human beings make hamburgers, human beings smile at customers in the drivethru, human beings build Happy Meals. And while we have relied far more today on technology than ever before, it’s not supplanted the importance of human beings in the workplace, I’ve just been able to reallocate where they work within the restaurant,” Rodrick said.

Mendelsohn, who owns six El Pollo Loco locations, has long championed workers rights, including helping trans workers connect with jobs.

But in her view, suddenly increasing one sector’s pay is not ideal: “When you’re singling out just fast food and going up so quickly, you’re putting people in a position of desperation. How do we survive?” she asked. But the two main ways are raising prices and reducing labor. And we don’t want to have to do either right now.”

Mendelsohn said her menu items have increased about 3% to 4% in price since February in preparation for the higher wages. She plans not to replace workers who have quit and have self-serve kiosks in place by next week. She may also implement artificial intelligence in the drive-thrus next year.

“I just wish it was being done over a longer period of time and it wasn’t just fast food,” Mendelsohn said. She said the state’s previous $15 minimum wage worked, because it was implemented over several years’ time and applied to every business.

Workers feel unsafe, can’t make ends meet

Loubet, who has worked as a McDonald’s cashier for six years while attending college, said she lives with her two parents in the same one-bedroom apartment they’ve been in since the 1990s.

Her mother has worked at the same McDonald’s for nine years. Loubet said in that amount of time, her mom went from earning about $15 an hour to about $17 an hour, an increase that was nowhere near keeping pace with inflation.

They’re hoping to move out of their apartment for a little more space.

“We’re actually looking outside of Los Angeles, just because with our salaries, it’s just impossible to look for anything lower than $1,000 for a basic studio apartment,” Loubet said. “Even if we stayed in Los Angeles and were earning $20 an hour, it would still put a strain on our finances just because, right now we’re only talking about rent. And that doesn’t include bills and food, and stuff like that. With the way the cost of living is rising in Los Angeles, and our pay is barely rising as it is, people need to realize that $20 is still not enough to feel secure.”

For her, security means having a little bit of cash on hand in an emergency, or, in her family’s case, a sudden loss of income when her father was injured and could no longer work his construction job.

But this law isn’t just about money.

Loubet remembers when a customer once asked for access to the bathroom: “I asked him to give me a minute to open it while I grab someone’s food. And by the time I turned around, he already was holding a knife to another customer. It’s certain things like this that you don’t expect to happen.”

Loubet is hoping the newly formed council can, along with existing state agencies, address security and safety standards at fast-food locations, recommend changes and investigate worker complaints.

Fast-food council sets a precedent

Mendelsohn, who has a seat on the council, said she is concerned about crime rising in general but is reluctant to add more requirements on individual restaurant owners.

The new council had its first meeting in March.

Workers’ advocates hope this council can not only address fair wages, but also ensure workers are scheduled enough hours to sustain themselves, and add new protections against unfair, at-will firings.

Additionally, they hope the council can discus fair working conditions, including wage theft, excessive heat and violence at work.

“It’s kind of in a way the great American experiment,” Mendelsohn said.“I love this nation. It’s so polarized on all these issues and to bring everybody together in one room to talk to each other and hopefully listen and understand – I think it’s a major step forward.”

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