In California, fast food chains pay a minimum wage of $20 an hour. This increase has led to an increase in final prices, generated unemployment, slowed investment and replaced workers with machines.
Workers in the fast food restaurant sector in California have the best salaries in the entire United States for their field. Their income exceeds up to six times the salaries received by professionals in Mexico.
Since April 1, 2021, and after negotiations between unions and companies, fast food chain workers in California have a minimum wage of 20 dollars per hour, which represents an increase of 23% from the 16.21 that were paid. in 2022. This would make workers in this sector the highest paid in the United States.
This minimum wage for workers in fast food restaurants amounts to $41,600 annually. Elsewhere, California has a minimum wage of $16 per hour, which amounts to $33,280 per year.
The figure also far exceeds the average salary of an engineer in Mexico. According to the Talent portal, an engineer has an annual income of 7,158 dollars (110,485 pesos), and an engineer with more experience reaches an annual salary of 12,585 dollars (210,000 pesos). That is, the gap between a recently graduated Mexican engineer and a worker in the California fast food sector is almost six times.
The dark side of minimum wage increases
However, it is not all positive news for workers in the fast food restaurant sector in California. The costs of wage increases are passed on to consumers, but rising labor costs also lead to automating processes, cutting the workforce, reducing work hours, choosing not to invest in California, or reducing hiring.
For example, the Pollo Loco restaurant announced that it would automate the preparation of sauce, Jack in the Box is testing frying robots and automatic drink dispensers. Companies such as McDonald’s, Chipotle and Jack in The Box also announced increases in their prices to face the wage increase.
Firms like Excalibur Pizza announced they would cut 21% of their workforce by mid-April, while Vitality Bowls said it will not open any more restaurants in California, and will go to other states. Cuts to the workforce have occurred since this year, when the increase in the minimum wage was more than announced.
Source: emprendedor
