SACRAMENTO, Calif. — Most fast food workers in California now make at least $20 an hour after a law increasing their minimum wage went into effect Monday.
Governor Gavin Newsom signed the bill into law last year.
Monday's wage change marks a $4 increase over the state's current $16 an hour minimum wage. The decision is drawing mixed opinions from consumers.
"Everyone needs livable wages" said Xavjeir Gdfaith from West Sacramento. "Fast food workers, during the pandemic, they were essential. They kept us going. They're human beings too, and they deserve to be able to stay afloat."
The top question on many minds: Will fast food restaurants put the costs back on consumers by raising their prices?
Researchers and the Service Employees International Union, the union leading the effort with fast food workers, addressed the topic at a Monday news conference.
"California businesses can absorb this increase in the minimum wage without increasing prices and without having to impact employment," said Ali Bustamante, with the Roosevelt Institute.
"A 10 cent increase in a burger, consumers will say, 'Oh gee, it's $5.10 instead of $5,' but they're not going to change their behavior," said Berkeley Dept. of Economics Professor Emeritus Michael Reich.
Paul Leigh, a professor emeritus from UC Davis’ Department of Public Health Sciences, has studied the impacts of minimum wages on public health.
He agrees the wage increase will have minimal effects on employment and that big chains, like McDonald's, can afford to pay workers more. But he said consumers should expect to see price increases.
"The best estimate is about a 5% increase in consumer prices, however the economic research hasn't really looked at this significant increase from $16 to $20 an hour. I would say that, at the outside, we may have a 10% increase in prices," Leigh said.
In a statement, Starbucks said they plan to offset the minimum wage increase by changing prices. McDonald's doesn't anticipate a uniform price change, but said franchise and corporate-owned locations will make modifications to their menus.
WATCH ALSO:
