The fast-food industry is about to change.
Assembly Bill 1228 (Holden, 2023) went into effect earlier this week and will impose a 25% minimum wage hike for fast-food workers. Democrats in Sacramento pushed this policy, conducted negotiations behind closed doors, and Governor Newsom signed it into law.
The implementation of this bill will have serious consequences for both small business owners, employees, and consumers. Instead of enabling our small businesses to be successful and create jobs in California, this bill does just the opposite and furthers California’s inflation woes.
The destructive law took effect on April 1. Ironically the new law was implemented on the very same day the Orange County Register reported that California is No. 1. in the U.S. for unemployment. According to California’s nonpartisan legislative analyst, that’s over one million unemployed workers.
Restaurant operators and Senate Republicans have been sounding the alarm about the negative impacts of this policy for months. Besides the serious consequences for both small business owners and employees, the implementation of this bill will be detrimental to economic mobility for those who need it most. Instead of more money, for many, it means unemployment.
Here in California job creation is down, unemployment is up, prices continue to escalate for just about everything, and the State is grappling with an unthinkably massive deficit. Exacerbating all this is that taxpayers and employers are fleeing the state, citing high prices and burdensome taxes and regulations.
We’re in a slowing economy. We need to enable employers to be successful so they can expand their businesses and put people to work. Bills that place more burdens on employers – like the fast-food worker wage hike – do just the opposite, stifling economic growth, increasing job cutbacks, and ramping up unemployment. Some are already opting to replace workers with automation.
Many fast-food franchisees already have announced price increases and begun layoffs. Pizza Hut
franchisees have announced plans to lay off around 1,200 workers. Chipotle, Jack-in-the-Box,
and McDonald’s plan to raise prices. Some Starbucks have already increased certain drinks by as
much as 50 cents.
Keep in mind that many franchisees are small, family-owned operations. They made it through
the pandemic shutdowns, but they may not make it through this.
Ultimately, Governor Newsom, Democrat lawmakers, and special interests are completely
responsible for job losses in the fast-food industry and collapsing businesses in California.
Ultimately, they will also bear responsibility for the ripple effects of all their bad policies, which
have intentionally raised the cost of living in this state to soul-crushing levels and pushed
taxpayers and job creators to flee or avoid California.
Only 15% of Californians can afford to buy a home, and if they can, finding affordable insurance
is next to impossible as major insurers have stopped writing new policies in the state. Gasoline
prices remain highest in the nation, and electricity rates are almost twice as high as the national
average.
Now we are adding fast food to this list.
When will they ever learn? California is in crisis. A decades-long string of misguided policy
decisions by the super-majority has put this state on the wrong path.
We need to support employers in California, not make it harder for them to do business and
create jobs. We need to uphold the entrepreneurial spirit that not only has always been a
hallmark of this state but also provides the backbone – and tax base – of our economy.