What $20 an hour means for fast food workers, franchisees and customers

Good morning. It's Thursday, April 4th. This is Ryan Fonseca and I'm joined by our fellow journalist Daphne Karabatore. Here's what you need to know to start your day.

What $20 an hour means, according to fast food workers, franchisees and customers

A sweeping change occurred this week within fast food chains like McDonald's, El Pollo Loco, and Starbucks. The food is the same. But the minimum hourly wage for the workers who serve you is now $20, a significant increase from the previous $16. The price of that burger or cup of coffee may rise.

Gov. Gavin Newsom signed Assembly Bill 1228 last year, affecting fast-food chains with more than 60 locations nationwide and more than 500,000 fast-food workers in California. The Times has been regularly covering the wage increase and its potential effects, including the possibility of higher prices as fast food operators pass on increased labor costs to consumers.

We wanted to hear from all parties affected by the new law – primarily workers, but also franchisees and customers. We emailed and called — and just went into some restaurants to talk to people. This is what they told us:

Workers are excited (plus a little anxious)

We asked workers a basic question: What does a $20 minimum wage mean to you?

Scarlett Arana has worked at El Pollo Loco in the San Gabriel Valley for about eight months. The 19-year-old said the larger salary would be a big help as she struggles with rising housing costs and inflation. She said she literally brings the money home, where she lives with her family, in order to put more money toward bills.

“Not only does it help me more with rent, but I can also help with other utilities [and] “Groceries,” Arana said. “That would be really helpful for us.”

Arana is also somewhat concerned that higher hourly wages could lead to fewer working hours — and that inflation could continue to creep in as her pay declines.

“That's the main thing I'm worried about,” she said.

Denise Rodriguez, 20, is the primary breadwinner in her family — and the pressure has been intense.

She had been working at a Wendy's restaurant in the San Gabriel Valley for about a year while taking juggling lessons at Mount San Antonio College. She is studying early childhood education and plans to become an elementary school teacher.

“You have to put in long hours just to get to a certain goal with your rent,” she said from a booth at work, still wearing her headphones. “I have to save for my school – and school is expensive.”

Rodriguez lives at home with her parents and younger siblings. Her mother recently gave birth via caesarean section and cannot return to work yet, and her father is on disability after suffering a workplace injury.

“I'm the one who brings in the income,” she said. “So it's a little difficult.”

For Rodriguez, a higher hourly wage would mean less pressure to work more than 40 hours each week, giving her more time to focus on school “or even take a mental break from work and school,” she said.

However, Rodriguez worries that her larger salary may not extend over the long term “because California itself is so expensive.”

“Yes, the minimum wage is going up, but what's next?” I was amazed. “I feel like at the end of the day, everything will go back up. It's not really going to be a living [wage]”.

Family-run franchises feel targeted

The California Family Business Alliance provided us with a statement that reflects the sentiments of many of its members. State lawmakers “selected family-owned fast food franchise operators to target them with wage and regulatory requirements not imposed on other businesses,” the group said.

“As a family-owned business, we are proud to provide jobs and opportunities to our valued employees but we also want to provide equal opportunity,” the statement read. “The minimum wage for everyone should be the same for everyone.”

Mike Mangione, 74, embodies what it means to run a family-owned business. He worked at McDonald's in Chicago in the late 1960s. A loyal employee, in 1967, Mangione bought a Long Beach McDonald's restaurant with his father.

Now, 57 years later, Mangione owns and operates 19 McDonald's restaurants throughout Los Angeles and the Inland Empire with his daughter, Jessica Damper, and son, Anthony.

For Mangione and his children, being a franchisee means more than just owning McDonald's locations. Both of his children worked in the kitchen and helped with maintenance. They received orders and processed payments, before eventually becoming licensed managers and operators.

“We run it like any other family business,” said Damper, 37, adding that she knew she wanted to be her father's business partner since she was five years old. “I celebrate birthdays with my employees, and we celebrate birthdays together.”

Damper feels the new law is like “an unfair target on our backs.”

“It's not just this giant company that's running things,” said Damper, who has more than 20 years of experience in the industry. I think this is where the misconception lies, especially among politicians. They don't understand the business and the tight margins we run on.”

Damper said she and her family are trying to deal with the change from a positive perspective.

“There may be great people who never thought about working at McDonald's before and never thought of this as an option, but now they will,” Damper said. Instead of laying off workers, she believes she will “hire more people who are friendlier and faster than before.”

D'Ambre said it doesn't anticipate any layoffs at its locations and that those who “work hard and give our customers a great experience will be fine.”

It is too early to know whether it will raise prices, and it will evaluate each site individually. Some of her employees are “enthusiastic,” while “others are more realistic.”

“Are we really helping anyone?” she asked. “I don't really know.”

Less bags of food, more leftovers

Wearing a blue Dodgers hat and matching jacket, Jose Navarro was enjoying his lunch at El Pollo Loco in Marina del Rey on Monday.

The 50-year-old South Gate resident had packed up his leftovers, fearing the new law would immediately increase the price of his favorite meal: chicken thighs, mashed potatoes with gravy, macaroni and cheese, and tortilla chips. But he forgot his lunch at home.

Navarro said he frequents fast food restaurants on workdays because it's easier to eat a warm lunch. He often works outside the office as a customer service representative at a telecommunications company, and reheating leftovers isn't always an option. He may have to change his habits if prices rise.

“Before, it was like I didn't want to carry it,” Navarro said. But now he said he'll ask himself, “Is it really worth it?” Will he have to “cut back a day or two” instead of relying on eating out most days?

However, when he needs to, he will pay whatever the new price is.

“Everyone should make a living wage,” Navarro said. But he also worries that owners might react by cutting workers' hours or laying them off — perhaps replacing them with machines.

“What seemed like a good idea will actually hurt people [the law is] “I'm trying to help,” he said. “But maybe this is a good example for other countries that might consider doing the same thing.”

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