The Breakdown

Explaining Southern California's economy

Can California fast food restaurants pay $15 per hour?

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Workers at some fast-food restaurants in dozens of U.S. cities -- including Los Angeles -- plan to strike for one-day on Thursday. This is their second nationwide demonstration in five months. The workers are calling for an increase in minimum pay to 15 dollars an hour -- and for the right to join a union. 

Twenty-three-year old Sonia Roldan lives with her parents in East Hollywood , and works 20 to 25 hours a week at a Los Angeles McDonalds while studying full time at Cal State Northridge. Her pay: $8.89 per hour.   It amounts to paychecks of about $350 every two weeks, and she says almost all of that goes directly to cover expenses.

"I end up with $50 at most which I have to stretch out for two weeks until the next paycheck,"says Roldan. "Fifteen dollars [per hour] would make a change. I would be able to stress less about working too hard and be able to pay my bills on time."

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$15/hour would nearly double California's current minimum wage of $8/hour, which is going up to $10/hour over the next  two years. Angie Pappas of the California Restaurant Association says labor costs represent a third of most restaurants' expenditures, so an increase that dramatic would have dramatic consequences…starting with a loss of jobs.

"It's gonna mean more automation, you're gonna see more kiosks, more self-serve, more self order," says Pappas, and very likely higher prices on the menu, which she says fast food restaurant owners really try to avoid.

"Everything is priced to the penny for a reason and it's the threshold of what consumers are wiling to pay," Pappas says. "You can’t ignore the economics of running a restaurant, where profit margins are typically one to five percent on average."

Chris Tilly, director of the UCLA Institute for Research on Labor and Employment acknowledges restaurants are likely to pass on rising labor costs to customers, but says that might not be such a bad thing.  

"The average fast food customer actually earns more than the average fast food worker," Tilly says, adding that if all fast food restaurants had to pay their workers more, competition wouldn't be an issue and companies might see an upside.

“There can be in investments in productivity and increases in worker commitment that mean there actually is a ‘win-win’,” says Tilly.

The movement to organize fast food workers began a year ago, when 200 workers in New York City went on strike for day.  Last August, another one-day strike involved some workers in 60 cities, including Los Angeles.  Organizers with the Service Employees International Union say workers in 100 cities nationwide will take part in Thursday's strike.

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