By 2022, the minimum wage in California will rise to $15. But the owner of a Chick-fil-A restaurant in Sacramento plans to go ahead and raise the wages of his employees now, offering a huge bump to $17 to $18 from the $12 to $13 he pays them now.
The sizable raise represents a possible new high water mark for fast-food workers, say restaurant industry analysts, at a time when competition for even unskilled labor is rising amid low unemployment, greater immigration scrutiny and fewer teenagers seeking to work in fast-food jobs.
While analysts can’t say whether a $17 to $18 hourly wage is the highest in the country for front-line fast-food workers, it certainly appears to be among the higher ones, said David Henkes, a senior principal with Technomic, a restaurant research and consulting business.
“We’re seeing a lot of operators that are in that $12 to $15 range, especially in higher price areas like California, but that’s sort of a new threshold,” he said. “In an era of 3.9 percent unemployment, restaurants — which typically are not seen as the most attractive of jobs — are struggling to not only fill jobs but then retain workers.”
The owner of the Chick-fil-A location in Sacramento, Eric Mason, told a reporter for ABC news affiliate KXTV that he would be raising his workers’ pay from $12 to $13 an hour to $17 or $18 an hour starting June 4, referring to the increase as a “living wage.”
In California, the minimum wage is currently $11 for employers with 26 or more workers, and will go up $1 a year until 2022.
“As the owner, I’m looking at it big picture and long term,” Mason said in an interview with the local news station. “What that does for the business is provide consistency, someone that has relationships with our guests and it’s going to be building a long-term culture.”
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A marketing staffer reached at Mason’s location said all questions were being referred to Chick-fil-A’s corporate office. A spokeswoman for the chain confirmed the wage figures and noted restaurants are individually owned and operated, leaving wage and benefit decisions to local owners.
“Chick-fil-A strives to create a compelling employment value proposition,” she wrote, noting the company is awarding nearly $15 million in college scholarships to employees this year.
Restaurant analysts said that, unlike retailers that have publicized wage increases above the minimum wage, fast-food restaurants tend to be operated by franchisees, making it trickier to set companywide standards. McDonald’s said in 2015 it was raising pay at its company-owned stores to $1 over the minimum wage, but according to recent media reports, some haven’t kept pace.
Many restaurant chains also operate on even tighter margins, making it harder to raise wages without raising prices for consumers or cutting into profitability.
But the high cost of turnover in the restaurant business — the turnover rate in the restaurants and accommodations sector was 73 percent in 2016, according to Bureau of Labor Statistics data — could mean a raise is canceled out by savings in re-training and hiring new workers, said Warren Solochek, senior vice president of industry relations for the food service practice at NPD Group.