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Gavin Newsom Signs Law Requiring Fast Food Restaurants to Pay $20 per Hour

Califoria Gov. Gavin Newsom (D) was exultant Thursday after signing a law to raise wages in fast food restaurants to $20 per hour and to create a new “council” that will govern the industry.

“California is home to more than 500,000 fast-food workers who – for decades – have been fighting for higher wages and better working conditions,” Newsom said in a statement. “Today, we take one step closer to fairer wages, safer and healthier working conditions, and better training by giving hardworking fast-food workers a stronger voice and seat at the table.”

The legislation, the Wall Street Journal reported earlier this month, was the result of months of intimidation by state Democrats against the industry. The Journal noted:

Democrats last year passed a law establishing a state council with open-ended authority to set wages, benefits and working conditions for fast-food shops. Businesses responded, as California law says they can, by qualifying a referendum for the November 2024 ballot to overturn the law.

But in mafia-like fashion, Democrats retaliated and threatened more punishment if fast-food restaurants didn’t drop the referendum. The June state budget revived a long-dormant Industrial Welfare Commission (IWC) with sweeping authority to set wages, hours and working conditions across all industries, not only fast food.

The deal Gov. Newsom announced rescinds funding for the state Industrial Welfare Commission and drops the joint-employer liability legislation. The state fast-food council will also be replaced by a board whose authorities are nominally more limited. In return, businesses dropped the referendum.

The current average hourly fast food wage in California is over $16. Already, critics say that $20 is not enough.

“In general, $20 an hour is not considered a living wage in California,” noted. “For a working couple with one child, that would be $23.81 an hour and for a single adult with no children, it would be $21.24, according to the Massachusetts Institute of Technology’s living wage calculator.”

Increasingly, fast food chains have been replacing workers with computers for tasks like customer service, and McDonald’s recently opened a fully-automated restaurant.

One reason: rising labor costs.


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