David Smith Comments on Fast Food Minimum Wage Increase in California for 2024

In a groundbreaking move for the state of California, the minimum wage for fast-food workers in quick-service restaurants with over 60 locations nationwide is set to increase to $20 per hour, up from the current $15.50, starting in April 2024. 

This decision, affecting approximately 400,000 workers, follows a legislative push to uplift the wages of the state's lowest-paid employees. The move has not been without controversy, with industry groups initially pushing for a $22 minimum wage, which could have led to price increases of up to 20%. 

Despite industry pushback and a compromise with the legislature, the new $20 per hour wage is expected to result in a 5% rise in the prices of fast-food items, according to economists. Pepperdine Graziadio faculty member David Smith notes that businesses often pass on higher costs to consumers rather than accepting reduced profits. 

While critics argue that higher wages could lead to significant price hikes, economists suggest a more modest impact, with potential benefits such as improved employee satisfaction, mental health, and overall well-being.

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