Minimum wage, fast food worker pay increase impacting Fresno businesses

FRESNO, Calif. (KFSN) -- California workers must now be paid at least $16 an hour as part of the new minimum wage.

On top of that, for fast food restaurants, another more significant pay hike is less than four months away.

But workers' groups say this money is needed, as more people rely on these jobs to make a living.

With the new year, California's minimum wage is notching up from $15.50 to $16 an hour.

"When it comes to raising the minimum wage, we are just trying to keep people afloat," said Dillion Savory, Executive Director of the Central Labor Council.

Dillion Savory says they advocate for laws like this to help people who cannot fight for themselves.

"We see that employers are not always willing to look at their books and give their employees the most that they can possibly afford, and it's our job to go and supplement that with good policy and make sure that families can afford their housing, afford their groceries and basic needs," said Savory.

Local businesses say the pay increases can be challenging to keep up with.

"It's causing us to have to increase our menu prices, as well as limit labor just to stay profitable," said Racelis Cardenas, general manager at Cheba Hut.

"When you get back to us as a company, are we going to have to raise prices? Yes," said Kris Stuebner, executive vice president with JEM Restaurant Management Corporation.

Cardenas says they just ordered new menus since prices have to rise.

In addition to raising prices, he thinks they will need to cut shifts.

"It's definitely limiting our available labor hours," said Cardenas.

At Chebahut and other fast food restaurants, there's another law, AB 1228 raising the minimum wage for fast food workers to $20 an hour later this year.

"We can't pass on a 10% to 15% price increase to our guests. It's not fair because those are our family, our friends, our community," said Stuebner.

Stuebner says he's lived in Fresno for decades and owns Wendy's and KFC locations here, so the increase is personal when he has to charge more.

He says that it ends up costing them a lot more than $20 per hour.

"We pay workers comp fees based on our payroll dollars. We pay other insurance based on payroll dollars. We pay taxes on that payroll dollar that a lot of people don't see. So it's not just $20 an hour that we're going to have to raise our prices. There's been a lot of behind-the-scenes," said Stuebner.

Stuebner added that it's now more crucial than ever to support local businesses.

"We have to look at all options just to survive at this point," said Stuebner.

The fast food minimum wage increase to $20 an hour is set to start April 1st across the state.

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