Following a historic 23% increase in maximum wages from $16 to $20, California’s fast food workers are among the highest paid in the State, a Market Watch report found. But is this enough to help people with housing problems?
People in Florida and California are living in cars
Michael Bordenaro, a real estate expert, recently warned that the high cost of living led many to be unable to afford traditional housing options. Though Florida and California deal with different crises, their roots vary, and the housing issue is one of the biggest problems in both states.
California’s wage hike still may not be enough
Bordenaro pointed out in a recent video that despite being among the highest-paid workers in the country, Californians working in the fast food industry will still struggle to find affordable living arrangements. He estimated that the fast food workers would be making over $41k, but to buy a home in California, one needs to make around $190k annually.
$20 only appears to be a nice sum
The real estate agent noted that $20 seems impressive, but he believes that sum is insufficient compared to living expenses. While jobs in the fast food industry are usually a stepping stone, many people still lack the education and skills to find better employers and will get stuck renting forever.
The other side of the coin
On the other hand, the 23% increase is forcing some businesses to close while others raise prices, which only angers customers. The prices were predicted to rise 3 to 5%, but some chains went above 7%. Another issue is that many people are now working fewer hours, so the wage increase means they are earning less than when they worked for $16 per hour.
Other workers are expecting increases in wages
Healthcare workers in California are expected to get $25 per hour in the upcoming years. The increase will start in June 2024 and continue through the next three years. Around 426,000 healthcare workers will see an increase of $6,400 during the first year of wage raise.
The implications
Many fear that others will leave their minimum-paying jobs to work in the fast-food industry or health care because it is still a raise despite not being a large sum compared to California’s living expenses. Some fast food workers already said that the new wages will help them with the bills, and due to costs, similar is expected from healthcare workers.
Other states
DC is also raising wages to $17.50 per hour in July. Unlike California, this minimum wage will affect all workers. However, you need to make around $160k annually to buy a house in this area. The upside of the raises is that it will improve the quality of living for some of the poorest, but they will still live paycheck to paycheck.
Learning from California
Some states are watching the situation in California, and later, they will follow DC to see how to avoid their mistakes. The federal minimum wage is still $7.25 per hour, which has not been raised since 2009.
Boosting consumer spending?
While wage increases typically boost spending and, therefore, positively influence economic growth due to inflation, price gouging, and global instability, the contribution might be less than expected.
Housing prices have been a hot topic for a while
One of the most challenging problems in the US is housing, and though the market has cooled in recent months, it is still not affordable for many. Some expected a house market crash, but experts say that’s highly unlikely, and prices will remain near record levels.
The economy is not coming back to pre-pandemic days
Many experts previously warned that the economy might never return to pre-pandemic days. It is not a state issue but a global one. Oil and many food prices largely depend on global factors, from weather to geopolitics, and they are impossible to control, and even worse, things are looking quite gloomy.
Wealth distribution is another problem
In the last three months of 2023, the top 10 percent of earners owned almost 67% of the total wealth in the United States. The top 10% of households by wealth had $6.5 million on average. In 2019, that number was 72%. The average household in the top 0.1 percent had a wealth of over $1.52 billion.
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Kate Smith, a self-proclaimed word nerd who relishes the power of language to inform, entertain, and inspire. Kate's passion for sharing knowledge and sparking meaningful conversations fuels her every word.