A new California law highlights the minimum-wage debate

Yesterday, California’s new fast-food minimum wage law went into effect. Fast food restaurants in the state are now required to pay their workers a minimum of $20/hour, up from $16/hour previously.

• This new law applies to all fast food establishments that have sixty or more locations across the nation with at least one being in California, KQED reports.

On one hand: The state’s fast-food workers will see a meaningful pay bump that would’ve otherwise taken years to achieve (if ever). The UK implemented a minimum wage law in 1999, and, in a recent study to mark its 25th anniversary, the independent Low Pay Commission said workers would’ve been ~$7,500/year worse off had the policy not been introduced and pay rose in line with average wages.

On the other: For consumers, higher prices are on the menu. Chipotle, McDonald’s, Starbucks, Jack in the Box, and Shake Shack are all planning to raise prices, with some franchisees also laying off employees or cutting their hours.

🤔 Innnnteresting: Bloomberg reported in late February that California’s new minimum-wage law would not apply to Panera Bread, since restaurants producing and selling bread as a stand-alone menu item were exempt – a stipulation that would’ve benefitted a wealthy donor of Governor Gavin Newsom. However, the Newsom administration later said the law does apply to Panera Bread because the restaurant does not make dough on-site.