Forced wage hikes turning small business dreams into nightmares

OPINION – Less than two years ago, I achieved a lifelong dream: I became a small business owner. After16 years in the fast food industry—starting as a team member, working my way up to shift lead and eventually becoming a general manager—I saved every penny I could to buy my own Subway restaurant. It was supposed to be the start of a better future for my family. Instead, it’s been a fight for survival.

I knew owning a small business would be challenging, but I never thought it would feel impossible. Last year, the state increased the minimum wage for fast food workers to $20 per hour—a 25 percent increase. This significant increase (that does not apply to any other type of small business in California) has turned my dream into a nightmare. I’ve had to lay off half of my employees, and now I’m working seven days a week alongside my team, covering shifts I can’t afford to fill.

The truth is, I had more financial stability as an hourly fast food worker than I do now with a restaurant of my own.

Now, the Fast Food Council is considering yet another wage hike. As someone desperately trying to stay afloat after last year’s wage hike, I urge them to reject this harmful proposal. The last increase has already devastated small business owners, and even just an additional 3.5 percent hike would force many of us to close—leaving our employees jobless and communities underserved.

The misconception that all local restaurant owners are wealthy or operate multiple restaurants couldn’t be further from the truth. In fact, 70 percent of us only own a single restaurant—working tirelessly to support our families and keep our businesses afloat. Since the last wage hike, my restaurant has faced declining sales, rising food costs, rent increases and many other financial uncertainties. I’ve had to raise menu prices, reduce employee hours and consolidate roles. As a result, most of my employees are making less than they did before the $20 minimum wage. because I’ve had to cut hours to stay in business.

A July 2024 survey of local restaurant owners revealed the toll of the $20 per hour minimum wage law:

• 98% raised food prices
• 89% reduced employee hours
• 74% face an increased likelihood of shutting down
• 70% reduced staff or consolidated positions

These aren’t just statistics: they’re real stories of small businesses like mine on the brink.

If another wage increase is imposed, I won’t make it to the end of 2025. My employees will lose their jobs, my community will lose an affordable place to eat, and my family will lose everything we worked so hard to build.

The ripple effects of this policy are already being felt. A recent report by Datassential shows that food prices at California’s quick-service restaurants have surged by 13.1 percent since the $20 minimum wage was signed into law—outpacing the rest of the country by nearly double. These hikes aren’t padding the pockets of local restaurant owners—they’re a desperate measure to survive in a state that has unfairly singled us out. Low-income customers pay the price in a state with an already sky-high cost of living.

It’s not just small business owners who are suffering—it’s also the workers this law was supposed to help. Between September 2023, when the legislation was signed, and June 2024, California’s quick-service restaurants lost more than 6,166 jobs, according to the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages. During the same period between 2022 and 2023, the state added 17,528 fast food jobs. That’s a staggering reversal. These job losses are a direct result of unsustainable costs for small businesses.

If the Fast Food Council pushes forward with another wage increase this year, the results will be catastrophic. Food prices will keep rising and squeeze California families, more jobs will disappear, and more dreams—like mine—will be crushed under the weight of policies that fail to balance fairness with sustainability.

That’s why more than 1,000 local restaurant owners like me recently signed a letter to the Fast Food Council asking to pause on any further wage increases in 2025. I urge the Fast Food Council to listen to the pleas of small business owners like me—those on the brink of losing everything—and reject another wage hike.

After working as a crew member at Subway for nearly 10 years, Marisol invested her life’s savings into buying a restaurant of her own, where she works alongside her employees. She lives in Duarte, CA.