California fast-food worker pay falls ‘far below a living wage,’ report says

California’s fast-food workers are paid nearly $3 an hour less — or nearly $6,000 less a year — than workers in comparable service-sector jobs across the state, according to a new report from UC San Francisco and Harvard.

The findings from the schools’ Shift Project also show they are more likely to have unpredictable schedules, with most employees working fewer hours than they’d prefer.  The study was not paid for by the fast-food industry but rather based on a survey of employees in the field.

Workers, back by union support, have been fighting for higher wages for years.

The Service Employees International Union is pushing for the passage of Assembly Bill 257 as part of its ongoing “Fight for $15 and a Union” campaign. The legislation would create a state-run council to negotiate wages, hours and working conditions for the more than 700,000 fast-food employees in California.

California’s minimum wage for all businesses is projected to increase to $15.50 an hour on Jan. 1, 2023. But several cities have already surpassed that, including Los Angeles ($16.04), Pasadena ($16.11) and Malibu ($15.96).

Wages have risen, but unionization in the industry remains elusive.

The wage gap

The average hourly wage for fast-food workers in the Golden State is $16.21 an hour, or $31,050 a year, the report said, but other service-sector employees average $19.15 an hour, or $36,892 annually.

The study defines “other service-sector” workers as hourly employees working at grocery stores, department stores, retail shops, clothing stores, pharmacies, hardware stores, electronics stores and casual-dining restaurants.

“While different regions of the state may differ in cost of living, the overall living wage for California is estimated at $21.82 an hour, which translates to $45,386 per year for a single adult,” the study said.

The “Low Pay, Less Predictability: Fast Food Jobs in California” report surveyed 2,034 California service sector workers between spring 2021 and spring 2022. It calls the wage discrepancy “a striking income gap” that falls “far below a living wage.”

“California fast-food workers are making only two-thirds of what a single adult with no children needs in a year to meet their basic needs,” the analysis said.

Anneisha Williams, a Jack in the Box employee and home care worker in Los Angeles, is among those struggling to make ends meet.

“I have to work two jobs and still struggle to pay rent every month,” she said. “The only way to fix it is by giving workers like me a voice on the job and improving standards across the state.”

Rents are rising

Adding to the service worker’s burden are escalating rents across Southern California.

Los Angeles County’s average monthly rent rose 14% during the second quarter of 2022 compared with a year earlier. That boosted it to a record-high of $2,407, according to a Southern California News Group composite of three leading apartment indexes.

Orange County saw an 18.5% year-over-year increase, hiking its average to $2,570 a month, and the Inland Empire’s average rent rose 16.4% to $2,002.

Mysheka Ronquillo, who works as a cook and cashier at a Carl’s Jr. in Los Angeles, makes $16 an hour. It’s not nearly enough, she said, and her hours are erratic.

“One week they might give you 32 hours and the next week it could be 16 hours,” the 40-year-old L.A. resident said. “So I essentially … I don’t have a budget. Sometimes I don’t know what my schedule for the week is until the day before.”

Ronquillo also provides in-home care to two patients and takes care of her 18-year-old daughter, who is autistic.

“It’s really like three jobs,” she said.

Thirty-eight percent of fast-food workers in California say they work less than 35 hours a week. Although some like the reduced schedules, 51% said they would prefer to work more hours, the report said.

AB 257

Fast-food workers staged rallies in Los Angeles and Orange counties last month to demand passage of AB 257, otherwise known as the Fast Recovery Act, which aims to protect them from wage theft, sexual harassment, safety violations and workplace violence.

The measure was passed in the Senate Labor, Public Employment and Retirement Committee in June and is set to be heard Thursday, Aug. 11 in the Senate Appropriations Committee before heading to a full Senate vote later this month.

Franchisees speak out

Stop AB 257, a coalition of franchisees and franchisors who oppose the legislation, says the bill would fuel higher prices and be redundant since California already has some of the strongest worker protection laws in the nation.

Michaela Mendelsohn, a franchisee of six El Pollo Loco restaurants in L.A. and Ventura counties, agreed.

“I think employees need better education on where to voice their concerns,” she said. “Most probably don’t have the slightest idea of who to call, other than their lawyer.”

Workers who have complaints — wage-related or otherwise — can take them to CalOSHA or the California Department of Fair Employment and Housing, Mendelsohn said.

“I think this whole thing is based on a false premise,” she said. “If you look at the state statistics, they show that only a little over 1% of the workplace complaints of harassment and other issues come from employees in the fast-food industry.”

The coalition spoke out against the bill as workers caravaned across Orange County last month.

“Today’s theatrics can’t disguise the fact that AB 257 would do nothing but harm California restaurants and the patrons who frequent them,” the group said in a statement. “The higher costs created by this bill mean less opportunity for entrepreneurs and employees alike, through fewer store openings, fewer jobs and reduced hours.”

Jesse Lara, a franchisee who operates 34 El Pollo Loco restaurants throughout Los Angeles, Orange and San Diego counties, doesn’t like the idea of an unelected body setting workplace wages and regulations for the industry.

“We employ over 1,000 Californians, so we could either see real damage done to our company, or we’d have to pass the increased costs along to consumers,” he said. “At that point, you have to wonder if you’d see the same people coming through the door.”

Lara said his restaurants are already grappling with inflationary price hikes.

“We’ve seen a huge increase in food costs,” he said. “We’re paying almost 80% more for chicken breasts, and fryer oil is up over 50%.”

Ronquillo disagrees and said a bill like AB 257 should have been enacted a long time ago.

“For the longest time we felt like no one had a voice and no one would listen,” she said. “That’s why it’s important to speak up for yourself because you never know how your one voice could impact people to make positive change.”

Lara said many workers seem content to maintain the jobs they have, as opposed to moving up the ladder.

“Some just don’t take the opportunities to get into positions where they could have better-paying jobs,” he said. “Thirty of our 34 managers started in entry-level positions with us. There’s a lot of potential for growth.”

Staff writer Jeff Collins contributed to this report.