New California law raises minimum wage for fast food workers to US$20 per hour, among nation's highest

California Gov. Gavin Newsom signs the fast food bill surrounded by fast food workers at the SEIU Local 721, Sept. 28, 2023, in Los Angeles, Calif. (AP Photo/Damian Dovarganes)

SACRAMENTO, Calif. -

A new law in California will raise the minimum wage for fast food workers to US$20 per hour next year, an acknowledgment from the state's Democratic leaders that most of the often overlooked workforce are the primary earners for their low-income households.

When it takes effect on April 1, fast food workers in California will have the highest guaranteed base salary in the industry. The state's minimum wage for all other workers -- US$15.50 per hour -- is already among the highest in the United States.

Democratic Gov. Gavin Newsom signed the law Thursday amid a throng of cheering workers and labour leaders at an event in Los Angeles. Newsom dismissed the popular view that fast food jobs are meant for teenagers to have their first experience in the workforce.

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"That's a romanticized version of a world that doesn't exist," Newsom said. "We have the opportunity to reward that contribution, reward that sacrifice and stabilize an industry."

Newsom's signature reflects the power and influence of labour unions in the nation's most populous state, which have worked to organize fast food workers in an attempt to improve their wages and working conditions.

It also settles -- for now, at least -- a fight between labour and business groups over how to regulate the industry. In exchange for higher pay, labour unions have dropped their attempt to make fast food corporations liable for the misdeeds of their independent franchise operators in California, an action that could have upended the business model on which the industry is based. The industry, meanwhile, has agreed to pull a referendum related to worker wages off the 2024 ballot.

"That was a tectonic plate that had to be moved," Newsom said, referring to what he said were the more than 100 hours of negotiations it took to reach an agreement on the bills in the final weeks of the state legislative session.

Mary Kay Henry, president of the Service Employees International Union International, said the law capped 10 years of work -- including 450 strikes across the state in the past two years.

The moment was almost too much for Anneisha Williams, who held back tears as she spoke during a news conference just before Newsom signed the bill. Williams, a mother of six -- seven if you count her beloved dog -- works at a Jack in the Box restaurant in Inglewood.

"They've been with me on the picket line, and they've been marching with me as well," Williams said of her children. "This is for them."

Newsom signing the law could win back some favour with organized labour, who sharply criticized him last week for vetoing a separate bill aimed at protecting the jobs of truck drivers amid the rise of self-driving technology. Unions have played a big part in Newsom's political rise in California, offering a reliable source of campaign cash.

Newsom's appearance in Los Angeles comes a day after Republican presidential candidates -- but not Donald Trump -- appeared at the Ronald Reagan Presidential Library in Simi Valley for their second televised debate. Newsom, while denying any interest in a White House run, has positioned himself as a foil to GOP contenders and has travelled the country to criticize conservative positions on abortion and gun rights. His actions on hundreds of bills before him may be viewed through the lens of his future political ambitions.

The new minimum wage for fast food workers will apply to restaurants with at least 60 locations nationwide, with an exception for restaurants that make and sell their own bread, like Panera Bread.

Right now, California's fast food workers earn an average of US$16.60 per hour, or just over $34,000 per year, according to the U.S. Bureau of Labor Statistics. That's below the California Poverty Measure for a family of four, a statistic calculated by the Public Policy Institute of California and the Stanford Center on Poverty and Equality that accounts for housing costs and publicly-funded benefits.

The new US$20 minimum wage is just a starting point. The law creates a Fast Food Council that has the power to increase that wage each year through 2029 by 3.5 per cent or the change in averages for the U.S. Consumer Price Index for urban wage earners and clerical workers, whichever is lower.

Now, the focus will shift to another group of low-wage California workers waiting for their own minimum wage increase. Lawmakers passed a separate bill earlier this month that would gradually raise the minimum wage for health-care workers to US$25 per hour over the next decade. That raise wouldn't apply to doctors and nurses, but to most everyone else who works at hospitals, dialysis clinics or other health-care facilities.

But unlike the fast food wage increase -- which Newsom helped negotiate -- the governor has not said if he would sign the raise for health-care workers. The issue is complicated by the state's Medicaid program, which is the main source of revenue for many hospitals. The Newsom administration has estimated the wage increase would cost the state billions of dollars in increased payments to health-care providers.

Labour unions that support the wage increase point to a study from the University of California-Berkeley Labor Center that said the state's costs would be offset by a reduction in the number of people relying on publicly funded assistance programs.

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Associated Press reporter Michael R. Blood contributed from Los Angeles.