Minimum Wage
Minimum Wage: More Money, More Problems?
By: Hugo Rosiles
Who loves fast food? About everyone in the world likes it. After all, fast food is tasty and affordable. Or so you thought...
What is AB 1228?
This past February, the bill AB 1228 was introduced to the state assembly by California State Representative Chris Holden. It passed in the assembly and state senate. Five months later California state governor Gavin Newsom signed the bill into law in September. This new law, AB 1228, increases the hourly minimum pay rate for fast-food employees. The original minimum wage in California before the bill was $15.50 an hour. Now, starting in April of 2024, the pay will be increased by five dollars making the new minimum wage for fast-food employees $20.50 an hour. Considered a new addition to the FAST ACT (Fixing America’s Surface Transportation), a 2015 law that implements new regulations on the fast-food industry in California, AB 1228 is a law going into effect next year. So how will this wage increase impact both restaurant workers and restaurant owners?
What do the workers think?
The people that will most be affected by this are the workers, so when The Bruin’s Eye asked employees about it this is what they had to say. Emanuel Martinez, a worker at the Mcdonalds located in Greenfield, tells our reporters that he is happy about the pay increase considering this new bill will benefit all fast-food workers significantly. Our reporter also interviewed Greenfield McDonald's employee, Daniel Morales, about the bill’s promised pay increase. Morales is also pleased with a pay raise, but the one thing that concerns him is how the prices on the menu will increase after this change to offset the costs of paying employees a higher wage. “It may not be as good as people think as prices at Mcdonald’s might start to go up. "When The Bruin’s Eye speaks to the G.H.S. Economics teacher Mrs. Scheirer, explains that the increasing wage is an economic necessity for all people, because while the average salary made in the fast-food industry is good, it is not enough money to afford basic essentials in California, like food, bills, and many other things. (Mcdonald’s Menu Prices Will Need to keep Rising, CEO says, Aleks Phillips) So, the prices have been increasing and it will only increase more.
The Problems with Raised Wages
As a wise man said with every solution there must also come a price to pay. Sure, the employee pay rate will be increasing, but this will also mean that the price for all fast-food items will be increasing. When The Bruin’s Eye, asked Greenfield High School’s Economics teacher, Mrs. Schierer, about what she thinks about the problems it can create she said, the problem with the law itself is that the corporations will begin to lose money and therefore begin to fire more employees. She was also quoted as saying that “Are they shooting themselves in the foot by raising wages and downsizing the labor force.” When we asked Emanuel Martinez again about the problems it can create. He says he is happy about the pay increase; however, he is concerned about the prices increasing because that will lead to people not willing to buy the items and them not getting paid as much.
Another potential problem with the passing of AB1228 is will that an increased wage causes more people to want to work, and an influx of workers may lead to a decrease in hours for existing workers. One question being raised is how long can the corporations afford to pay their workers? If profits are the driving force behind fast food company’s hiring and firing policies, we may see an increase in workers getting fired from their jobs, so the fast-food corporations do not lose money. However, many besides fast food workers believe this would be a mistake. When The Bruin’s Eye, asked Mrs. Schierer, who teaches Economics at Greenfield High School, told The Bruin’s Eye, that she believes some fast-food restaurants may be “shooting themselves in the foot by raising wages and downsizing the labor force.” She mentions a good point because they are going to have to pay all their workers and the more there is, the more money they lose. So, people unfortunately who work at fast food places are going to have to go. Another problem changing is the portion sizes could be another issue. The more money the corporations spend on employees, they cannot afford to buy bigger portions for all the food. Overall, the wage increase will not be in effect until April 2024, so they have time to figure out all the prices of items.