California Gov. Newsom signs law to raise fast food worker wage to $20 per hour

AP Photo/Damian Dovarganes

California fast food workers are poised to earn a minimum wage of $20 per hour, thanks to a bill signed into law by Democratic Governor Gavin Newsom on Thursday.

Effective from April 1st, this significant wage boost will make California's fast food workers among the highest paid in their industry across the nation, according to data from the University of California-Berkeley Center for Labor Research and Education. This initiative is in line with California's commitment to worker rights, as demonstrated by its existing minimum wage of $15.50 per hour for other sectors - one of the top rates in the U.S.

The atmosphere was electric at the signing, where Governor Newsom, surrounded by jubilant fast food workers and prominent labor leaders, formalized the bill. “This is a big deal,“ Newsom remarked, emphasizing its significance.

This wage increase underscores the considerable leverage labor unions wield in California. Over the years, these unions have rallied for better pay and improved working conditions.

Additionally, this bill's signing marks a temporary truce in the ongoing tug-of-war between business and labor factions over the industry's regulation. In a spirit of compromise, labor unions shelved their move to hold fast food giants accountable for the actions of their individual franchisees. Simultaneously, the industry has agreed to retract a 2024 ballot referendum related to worker remuneration.

With California's fast food workers currently earning an average wage of $16.60 per hour (amounting to slightly over $34,000 annually), many fall short of the state's poverty threshold for a family of four. This metric, crafted by the Public Policy Institute of California and the Stanford Center on Poverty and Equality, offers a comprehensive view by considering housing costs and available public benefits, the Associated Press reported.

However, the journey doesn't end with the $20 hourly wage. The newly signed law establishes a dedicated fast food council vested with the authority to annually adjust this wage until 2029. This adjustment could be a 3.5% increase or align with the U.S. Consumer Price Index for urban wage earners and clerical workers – opting for the lesser of the two.

This wage hike will be applicable to eateries boasting a minimum of 60 outlets across the country. However, establishments like Panera Bread, which produce and market their bread, are exempted from this regulation.