Fast food minimum wage raise impacts Central Valley workers and customers

FRESNO, Calif. (KFSN) -- A new state law is raising the wages of fast-food workers.

Starting Monday, thousands of employees, many at large fast-food chains, will make at least $20 an hour.

"500,000 workers across the state of California are about to get a significant wage because the labor movement is making groundbreaking investments in our policy," Central Labor Council Executive Director Dillon Savory told Action News.

Workers at most fast-food chains with 60 or more locations saw their minimum wage go from $16 to $20 an hour. It is an increase Savory says could make all the difference.

"...Being able to just get that one step up," Savory said. "Maybe put some money away for their kids for college. It's all about getting people above the poverty line, and then they can start thinking about prosperity for their families."

While labor groups and employees applaud the move by Sacramento, restaurant owners have concerns.

Kris Stuebner is the executive vice president of the Jem Restaurant Management Corporation. His group runs 15 KFCs in the Fresno area -- and 42 Wendy's throughout Central California.

Stuebner says the new minimum wage will cost Jem more than $20 an hour.

"It's $20, plus all of our worker's comp will go up because it's based on your payroll dollars," Stuebner said. "The payroll tax dollars we pay will go up. It's more than just $20."

With higher labor costs, some national chains already say they plan to raise menu prices.

ABC News reports that McDonald's and Chipotle will raise their prices, passing along at least some of their higher operating costs directly to customers at the register.

But for the KFCs and Wendy's in the Valley, Stuebner says his group will look to cut costs before increasing prices.

"Can I turn my lights off? Can I not have the air conditioning on right now? Can I turn it on later? That's things that we're looking at right now," Stuebner said. "Where can we save to help offset those costs as well?"

One labor council told Action News it expects there will soon be a push for $25 an hour.

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