California’s fast-food wage hike puts Democrats on defense

It’s no secret: California is expensive. Californians pay more than most for electricity, gas and rent. Here, even eggs cost more.

Now, fast food is likely to join that list, as a $20 minimum wage goes into effect this week for workers at major restaurant chains, including Jack in the Box, McDonald’s, Chipotle, Starbucks and more. others.

The new industry-specific minimum wage could help lift half a million California fast-food workers out of poverty, but could also add additional financial concern for low-income residents, as some business owners have already said that they would raise prices in order to reduce costs. to cover the mandate.

“If it’s for 50 cents, I’ll still come,” Ashley Ollarsaba, a mother of five from Los Angeles, said of a possible price increase as she ate an ice cream cone at a McDonald’s in Carthay Square on Monday. “If it’s for a few dollars more, I don’t know.”

The fast-food wage law takes effect as state lawmakers debate how to lower Californians’ notoriously high electricity bills and grapple with an insurance crisis that’s raising costs for many. many owners.

Taken together, these issues highlight a challenge the state faces in achieving Democrats’ progressive policy goals, such as combating climate change and improving conditions for low-wage workers: Someone has to pay for this – and it often falls to the consumer.

“What everyone struggles with is the difference between what they ideally want and what that partly means for their wallet. It’s a dilemma,” said Mark Baldassare, statewide survey director for the Public Policy Institute of California, a nonpartisan research firm.

“We know the polls show people want better wages,” he said. “But on the other hand, we know that not everyone is able to feel comfortable with what that might mean for them when they look at their credit card bill.”

Baldassare said policy decisions by Democrats who control the state Capitol may now face more scrutiny because Californians are “very nervous” about their finances.

Even as economists repeat that pandemic-fueled inflation is easing, voters remain deeply frustrated by the costs. These nationwide concerns are amplified in California, where residents pay more than most other Americans well in advance of further cost hikes.

Economic concerns were at the forefront of Californians’ minds when the Public Policy Institute surveyed adult residents in February. One in five Californians said the most important category of issues Democratic Gov. Gavin Newsom and the Legislature need to work on in 2024 are jobs, the economy and inflation.

Supporters of the fast-food wage requirement, including the state’s powerful worker unions, rushed this week to assure customers that any price increases they saw were the choice of wealthy and wealthy companies. was not required by the new law.

The Service Employees International Union, which has pushed for higher wages in fast food, points to research that shows wage increases actually benefit businesses and boost the economy.

“With a 10-cent increase on a hamburger, consumers will say, ‘Oh my God, $5.10 instead of $5.’ But they won’t change their behavior,” Michael Reich, professor of economics and president of the Center on Wage and Employment Dynamics at UC Berkeley, said at a news conference with SEIU.

It’s still unclear exactly how much prices will rise at restaurants, but Republicans have taken advantage of the cost panic to present themselves as more sympathetic to the concerns of ordinary Californians in a state where the party doesn’t have enough power. to shape policy.

“It’s already too difficult for families to be able to afford in this state,” said Sen. Rosilicie Ochoa Bogh (R-Yucaipa), who opposed the fast food minimum wage bill. “What we need to do is work to reduce the cost of living and increase opportunities for growth, not the other way around. »

Republicans and some Democrats found rare common cause when they opposed a recent proposal to raise electricity rates, a sign that cost concerns cut across party lines.

Some Democrats in the Legislature reversed their earlier support for an income-based electricity pricing plan after hearing from outraged middle-class voters fed up with skyrocketing utility bills. electricity and fell victim to new cost increases. The fallout is not worth it for these Democrats; they ended up siding with their cost-concerned constituents against some environmental activists who wanted to charge some residents more for electricity under a complex proposal to fund improvements to prevent wildfires and transition to clean energy.

“From the outset, a conscious effort was made to ensure that there were no real price shocks. …and try to soften that blow,” said Ethan Elkind, director of the climate program at Berkeley Law’s Center for Law, Energy and the Environment. “We have to go as fast as the public can accept it. »

While California Democrats find themselves in the unusual position of playing defense while continuing to promote liberal ideals, they say some of their policies are a response to the state’s affordability crisis, without the aggravate.

State Sen. María Elena Durazo (D-Los Angeles), who authored the law creating a minimum wage for health care workers, which is also plagued by debates over costs, said she would not let not his detractors blur the Democrats’ fight for a “living wage.” » in a state that is home to some of the most expensive cities in the world.

And big fast-food chains can afford it, she says.

“This is actually a solution in response to the fact that the costs of everything are increasing,” Durazo said, noting that food costs had increased before the wage standards took effect. “It’s not workers getting better pay that’s the problem.”

Ollarsaba, the mother of five who stopped for lunch at McDonald’s this week, said she supports the new law raising workers’ wages even if it means small price increases are on the horizon. She said she sympathizes with the workers who serve minimum-wage burgers and fries: “I think they work really hard at it. »

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