The minimum wage debate: Young workers weigh in

Gov. Gavin Newsom announced a historic $20 an hour raise for California fast food workers on April 1, now positioning the state to have the highest fast food salary nationwide. The law marks a major win for employees and unions, as it significantly raises their wages and sets a precedent for other states to follow.

However, the new hourly wage has resulted in businesses scrambling to make up for these changes.

Executives at massive chains like McDonald’s and Chipotle have already gone back to the drawing board, warning customers that a price raise is approaching.

One Taco Bell employee, who asked to remain anonymous, expressed her concerns for fast food restaurants raising prices too high. Despite receiving the new $20 hourly pay, she worries that customers will struggle in return.

“[At] the Taco Bell I work at, there’s a lot of homeless people around. There’s this one lady who collects coins every Sunday at the drive-thru that’s left on the ground.” she said. “If I didn’t get the food for free, I wouldn’t be buying it. It costs $6.57 here to buy one quesadilla, and to me that’s just too much.”

Just a few days after the raise, a Burger King in Los Angeles saw nearly a 12% increase from $15.09 to $16.89 for its Texas Double Whopper meal.

“A lot of people [here] are low-income. To me, it’s like, was this really worth it? Customers are showing up and can’t afford the meals anymore.” she said.

The minimum wage increase has also led to massive layoffs, impacting thousands of employees. Over 1,200 California delivery drivers for Pizza Hut lost their jobs, due to the chain terminating their first-party delivery services. Additionally, businesses such as Mod Pizza have shut down 27 of its locations, including five in California. Owners have even resorted to installing kiosks in placement of cashiers to recover for the increase in wage.

As California combats these new implications of its landmark wage increase, the disparity between state and federal minimum wage standards becomes glaringly apparent.

Since 2009, the federal minimum wage stands at $7.25 an hour — almost a third of how much California fast food employees are now paid.

President Joe Biden issued an executive order to grant a $15 minimum wage for federal workers in 2022, but where does this leave everyone else?

As of 2024, the poverty threshold for a single person is $15,060. A full-time employee being paid the federal minimum wage would make $15,080 a year — just $20 above the poverty line.

For an employee making minimum wage outside of California, some believe the pay is too little for their labor.

“Minimum wage jobs are never minimum work,” said Simi Saini, HomeGoods employee and sophomore biology major at George Mason University.

Saini, who lives in Fairfax County — one of the most expensive counties in the U.S. — believes that the minimum wage in Virginia is too low.

“I want to go to medical school, and that’s a lot of money and debt,” said Saini. “It feels like I’m doing the absolute bare minimum to support myself, unless I put all my time and effort into work which is being put into my studying.”

Virginia Gov. Glenn Youngkin vetoed Democratic legislation to raise Virginia’s minimum wage from $12 to $13.50 in 2025, and eventually to $15 in 2026.

But for many individuals working minimum wage jobs, their paychecks merely cover any of their financial responsibilities.

“My friends are servers, so they get paid even less an hour and rely on tips, which in a college town, does not work out since college students can’t afford to tip well,” said Anna Fielder, sophomore marketing major at the University of Arkansas.

As states like California have shown increases in wages to address rising costs of living, other states lag behind — leaving employees grappling with these implications.

“What [workers] are being paid now isn't enough to financially support a family. It's not enough to survive in this current economy, especially in the Midwest … it's just not enough,” said Jack Maloney, an 18-year-old high school student who works at Culver’s in Orland Park, Illinois.

While higher wages are demanded by its employees, it also poses significant challenges for its business owners, specifically its managers who make above minimum wage.

Sukhmani Kaur, a shift manager at a sandwich shop in the Bay Area, questions the disparities in pay between managers and their employees.

“General managers don’t get a raise which is unfortunate because they are getting paid a couple of dollars more than I am to manage a restaurant as I manage a shift,” said Kaur.

Kaur, who also worked as a general manager for Chipotle, believes that all employees should be accounted for when it comes to wage increases.

“I did get a raise, which I am happy about. It will help those who pay bills and are in school and work at the same time. It’s just sad how the people who get it are only shift managers and crew.” said Kaur.

When raises are distributed to entry-level jobs, it can lead to pay compression, where the gap between salaries of those employees and higher-level positions narrows significantly.

Jennifer Pate, Ph.D., professor of economics, noted that pay compression happens to most to the employees that fall in the middle.

With inflation rising, the cost of living is also increasing rapidly across the nation. In the face of these challenges, balancing the needs of workers with the viability of businesses is imperative.

“At what point will we start losing businesses if they can’t increase prices enough to close that gap?” questions Pate.

While higher wages are demanded by employees, the repercussions ripple through its owners, impacting not only their operations but the quality of life of the communities they serve.

Finding a middle ground between employees and higher-ups is not only a necessity for equity in the workplace, but imperative to ensure the success of businesses to come.

Additional reporting by Maco Jeleniewski, E2024 freelancer