Many CA Fast Food Workers Actually Fine With Working Fewer Hours For More Money

They can see their families now!

Photo by Boshoku on Unsplash

On April 1 of this year, some workers in California got a big fat raise when the $20 minimum wage for fast food employees kicked in. It was a necessary boost, given that the living wage in the state for a single adult with no children is $27.32 an hour.

Of course, the franchisees complained then and they are complaining now, trying to frame this as something that is actually bad for workers — even as job growth in the industry continues, with 8,000 new jobs added since the law went into effect.

Several franchise owners complained to reporters at the Associated Press that they have had to cut hours, let employees go and raise prices in order to keep up with the rising cost of labor.

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Via AP:

“I’ve been in the business for 25 years and two different brands and I never had to increase the amount of pricing that I did this past time in April,” Juancarlos Chacon, an owner of nine Jersey Mike’s in Los Angeles, said.

A turkey sub for under $10? It’s now $11.15. While customers are still coming in, he’s seeing them cut back — no drinks, no chips, no dessert.

Could have something to do with a bag of chips and a bottle of soda adding almost six bucks to the bill, but that does sound very distressing indeed.

Since their core business is lunch, Chacon has been reducing staffing in the mornings and evenings. He’s also cut a few part-time employees, going from 165 total to about 145.

It wasn’t only entry-level workers that got a pay raise. Shift leaders, assistant managers, and everyone else up the ladder had to get raises too, and labor represents about 35% of his costs.

“I’m very nervous,” Chacon said.

Thirty-five percent may actually be quite low. According to The Fork CPAs website, “[T]here is no ideal labor cost as a percentage of sales, but there is an ideal prime cost as a percentage of sales, which is <60% for quick-service restaurants and <65% for full-service restaurants. A 40% labor cost combined with a 20% food cost in a full-service restaurant is very good.”

The employees themselves, however, are not complaining. Many, in fact, are fine with the reduction in hours because they’re still making more money than they did before the wage increase.

The AP reports:

Julieta Garcia, who’s been at a Pizza Hut in Los Angeles for a little over a year, said she’s now working five days instead of six. But that’s not a bad thing, she said, since she can spend more time with her 4-year-old son. The extra money means she can pay her cellphone bill on time, instead of having to turn off service, and take her son to get his tonsils checked out, she said.

Howard Lewis, a 63-year-old retiree who works at a Wendy’s in Sacramento, said he has been investing his extra money.

“Today was payday and I bought $500 worth of stock,” said Lewis. He’s also helping his ex-wife fix the brakes on her car.

So these people are working less, earning more, and contributing more to our economy than they were prior to the wage increase? That seems like a good thing, no?

It may be, actually, that we are coming to a time at which reducing the number of hours people work (before they are eligible for overtime) makes the most amount of economic sense, anyway, for a variety of reasons — including advancements in technology, the necessity for more living wage jobs for more people, etc.

It may also be that, to some degree, super cheap fast food is just not a viable business model anymore, but that actually has a lot more to do with the extreme concentration of wealth at the top of the economic ladder than it does with what people at the bottom are making. Capitalism is a pyramid scheme, and the top of the pyramid has become so ridiculously heavy that it is crushing everyone else. What actually needs to happen is for the top of the pyramid to become lighter — through a combination of taxation and raising the wages of the middle class to keep up with the increased costs of goods and services.

Yes, inflation is bad, but the truth is that we have been paying far less than we should have been for pretty much everything for a very long time now. American companies keep wages low not just for those at the bottom but for pretty much everyone who isn’t at the top — which means that a middle class person can’t afford a hamburger made by a fairly paid working class person. That’s the real problem.

The solution to our economic problems is not cheaper goods and services, it’s having a more reasonable distribution of wealth instead of a bizarre set-up where there are extremely rich people, extremely poor people, and a shrinking middle class.

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If we were to raise taxes in a way that made it “not worth it” to have above a certain amount of wealth, or for a company to endlessly expand, we could use that extra money to fund public goods that benefit us all and lower the cost of living — health care, higher education and job training, public transportation, public housing, public works programs, etc. It would also drive up wages because those at the top would likely pay people more rather than just give the rest of the money straight to the government. Then, perhaps, we could actually afford fast food burgers made by people making a living wage, made with ingredients harvested by people also making a living wage.