Keith Miller has been franchising Subway restaurants in Northern California for 35 years. During that time, the minimum wage he must pay his employees has nearly quintupled. He said customers still ask him what happened to the $5 footlongs, which were a staple on the subway when the minimum wage was less than half of what it is now.
On Monday, the minimum wage for fast food workers in California jumped to $20. The statewide minimum wage is $16, but some municipalities (including San Diego) offer slightly higher base wages for workers within city or county boundaries.
“You keep wondering when you're going to break the camel's back? And what we're afraid of right now is, to me, it's kind of an experiment,” Miller said.
Significant changes for some fast food workers in California are set to go into effect, but there are already concerns about ripple effects, including possible layoffs. NBC 7's Kelvin Henry spoke to San Diego economic experts about the potential impact.
A recent report from the state's Office of Legislative Analysis found that a $16 minimum wage is barely enough to maintain California's cost of living, especially in coastal areas and metropolitan areas.
“Increasing the minimum wage will help to some extent, but without major changes in the housing market, it's somewhat limited in what it can actually do,” said Seth Kirstein, an economist with the Legislative Analyst's Office who worked on the report. ” he said.
Labor rights advocates say the new minimum wage is a big victory. The law that codified the new salary standards also established the Fast Food Council to authorize future pay increases.
Starting Monday, fast food workers in San Diego and across the state will start receiving $20 an hour. But labor experts say the increases could come with hidden costs. NBC 7's Chandel Menezes reports.
“That's why we are fighting for stronger working hour protections at the Fast Food Council,” Angelica Hernandez, a McDonald's worker, said in Spanish. “Our fight is never about racism, it's about the industry. He had the power to improve things.” .
Meanwhile, Miller, the Subway franchisee, doubts this will be a change that will crowd out franchisees that operate only a small number of stores.
“You want to do the right thing, but there comes a point where it's not worth it anymore. There's risk and responsibility in owning a business,” Miller said.
