LOS ANGELES — Inside a small Subway restaurant in Burbank, the lunch rush slowed. But for owner Angel Mendez, the pressure hasn’t let up.
Pressure isn’t new to Mendez. He came to America at age 11 with nothing but the clothes on his back, leaving his family and everything that was familiar to him behind in Mexico. He says his only goal was to achieve the American dream.
Mendez started as a sandwich maker at subway 37 years ago. Now, he owns his own store. He has a family and a house, but lately, he says, he has been worried about all of that slipping away because business has been harder than ever.
“Right now, I’m single shifting. I’m bringing in family members, like my wife and my daughters, to absorb the costs,” Mendez said.
In April of 2024, following the passing of a landmark law in California, fast-food workers say a major hike in their minimum wage, earning $20 an hour.
Mendez says that while he supports the idea of giving his employees a livable wage, the new law has been hurting his bottom line. He noted that since the change, his staff has shrunk from 14 to seven, his bi-weekly shipments of fresh food have been cut down to once a week, and sales have dipped. Meanwhile, he said, his supply and labor costs have remained high.
But for workers like Edgar Rencinos, the pay hike has been life changing.
Standing in the library of his new apartment building, Rencinos said it’s night and day from where he was just one year ago: sleeping on the streets in downtown Los Angeles after falling into homelessness.
Rencinos works as a cook at Wingstop. He went from making $17 an hour in 2023 to $20 an hour in 2024. He said the pay bump helped him afford an apartment that he shares with three roommates. But now, he’s worried about keeping up with his new cost of living.
“My rent has been going up like 10% in the last year,” he said. “Everything is going up.”
California’s newly formed Fast Food Council is set to vote on a 3.5% wage increase later this year. If approved, wages would rise to $20.70 an hour.
Rencinos said those 70 cents can still help him achieve his goals, outside of the fast-food industry.
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Studies from UC Berkely’s Institute for Research on Labor and Employment show the impact on consumers hasn’t been as drastic as some may think. That’s according to lead researcher Michael Reich.
We did find that wages went up, actually not as much as we expected [them] to. And we did find that prices went up a bit, too, but employment did not go down,” Reich said.
Their research shows prices went up 2% in the last six months, or about 15 cents for a typical $4 hamburger.
As for the impact a 3.5% wage increase would have on the industry’s workers, he says that “this would help them keep up with the cost of living. It would have very little effect on the number of jobs and hardly any effect on prices.”
But for owners like Mendez, another wage hike, he said, might be his breaking point.
A final decision on the wage increase could come in the next few months. Business owners say they’ll keep fighting against it, while workers like Rencinos hope it will help him achieve his American dream.
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