California fast-food managers rake in massive raises – despite restaurants hiking prices, shutting stores over $20 minimum wage
Managers at California fast-food restaurants have quietly raked in massive raises – despite major chains hiking prices and some shutting locations after the state passed a $20 minimum wage.
While the pay bump for workers from $16 an hour has garnered much of the attention, a separate provision that has received less notice since the controversial law went into effect April 1 also boosted pay for managers at quick-service restaurants by 25% — to least $83,200, from $66,560.
At the fast-growing chicken chain Raising Cane’s, general managers in the state can now see their annual pay reach $174,000 from bonuses based on their location’s sales and profit, according to the Wall Street Journal.
Monique Pizano, a 27-year-old general manager at a Raising Cane’s location in Carson, Calif., about 15 miles south of Los Angeles, saw her annual base salary rise from $79,000 to $85,000 after the law was implemented, the Journal reported.
Pizano, who manages 96 employees, is eligible for a monthly bonus of between $5,000 and $7,500 if she hits certain financial milestones with the Baton Rouge, La.-based chain — which has around 90 of its 700 restaurants in California.
The Carson location attracts an average of 700,000 customers per year and does around $9 million in annual sales.
“It’s been life-changing for my family,” Pizano told the Journal.
However, the fast food minimum wage law has been painful for many businesses the Golden State.
A recent study by the analytics firm Placer.ai found that visits to popular fast food chains including McDonald’s, Wendy’s and Burger King have decreased since the new law went into effect.
In the eight weeks spanning April and May, foot traffic at Burger King fell 3.86%, while Wendy’s was down 3.24% and McDonald’s slipped 2.5%, according to the report.
Meanwhile, Rubio’s Coastal Grill was forced to shutter dozens of locations across California. The company, which recently filed for Chapter 11 bankruptcy protection, cited the increasing cost of doing business in the state.
Another fast food restaurant, Fosters Freeze, recently closed a location near Fresno, saying the franchise owner could no longer afford to pay workers the upgraded salaries.
In the six-month period leading up to the new law being enacted, fast food prices in California rose on average by 7% — forcing franchisees in the state to slash work hours, postpone capital improvements and expedite the deployment of automation features such as self-serve kiosks.
A report published earlier this year by Kalinowski Equity Research found that fast food chains such as Wendy’s, Chipotle, Starbucks and Taco Bell raised their menu prices by as much as 8% in preparation for the new minimum wage law coming into effect.
The law has also been blamed for the decision by In-N-Out Burger to raise its menu prices.
In Los Angeles County, a double-double burger combo at In-N-Out sells for $11.44 — a $0.76 increase from last year.
