Trade group says thanks to $20 per hour minimum wage for fast-food workers after law signed by Gavin Newsom, 10,000 jobs have been cut.
Today, the California Business and Industrial Alliance (CABIA) ran a full-page ad in the statewide edition of USA Today showcasing the detrimental impact of California’s recent minimum wage hikes for fast-food restaurants.
The ad lists out the mock “obituaries” of restaurants that have been harmed. It also calls out Governor Newsom for signing California Assembly Bill 1228 into law, which includes a $20 per hour minimum wage for fast-food workers, and establishes a fast-food regulatory council with the authority to raise the industry’s minimum wage annually.
Since AB 1228 was signed into law last September, California fast-food restaurants have cut nearly 10,000 jobs, representing a 1.3 percent change from September 2023. The ad highlights numerous fast-food chains across California that have been forced to raise prices, lay off workers, and shut down stores, creating a wave of concern throughout the Golden State’s business landscape. See the ad here.
Tom Manzo, President and Founder of CABIA, released the following statement:
“Unprecedented wage hikes have unprecedented consequences, especially in California where the odds are already stacked against businesses. The rapid job cuts, rising prices, and business closures are a direct result of Governor Newsom and this short-sighted legislation. California’s business community and its workers deserve better. We need policies that support growth and stability, not ones that jeopardize livelihoods.”
Editors Note – According to the Ad:
- Burger King – slash workers hours + introducing self-service kiosks.
- Bar Moruno – Shuttered noting labor costs used to be below 30%, now inching to 40%
- Cinnabon – questioned whether they will remain in the stated
- El Pollo Loco – working to automate its salsa-making
- Foster Freeze – Restaurants closed
- McDonalds – possible reducing hours, increasing prices
- MOD Pizza – closed 5 locations
- Pizza Hut – laying off delivery drivers
- Round Table Pizza – cut 73 driver jobs, 21% of its workforce
- Rubios – 48 locations closed
- Subway – Shrunk sandwich chains in US by 443 stores
Related Stories:
- Sept. 28 – California Increases Minimum Wage to $20 Per Hour for Fast Food Workers: Beginning in April, California’s minimum wage for the state’s 500,000 fast-food workers will increase to $20 per hour – the average hourly wage for fast-food workers in 2022 was $16.21. Through the Fast Food Council, workers will have a stronger say in setting minimum wages and working conditions, including health and safety standards.
- Dec 27 – New Laws in California 2024
8 comments
Other then MOD pizza and the occasional Cinnabon, the restaurants on this list suck. The frustration is that these people got a pain increased but the quality of the service stayed as shitty as it was before. Plus most of the restaurants on this list increased prices based off the higher wage increase, the consumer was only willing to pay so much for a poor product.
So why did Gavin do this? Think about this, as the lowend worker’s make more it drives up the union wages to keep the gap. He doesn’t care about the fast food workers or the companies that employ them. Sure looks good though. As their wages go up less people work, less people buy less food hence closures. Think about it.
Gavin didn’t do it by himself. Our whole misguided state legislature did it in a transparent attempt to reap votes. And as noted in the report, it is already proving to be very bad policy.
Yep and dems run this state.
Rubios and Subway are real estate companies fronting as restaurants, so no big loss there. Fosters Freeze is a treasure and I fear we will never see its like again. A moment of silence for the best American Chinese hole-in-the-wall Chop Chop. There was a 50/50 chance you would get food poisoning, but at $10 for a pound of Good Chinese food, I’d spin that chamber.
The bigger question is…has any of this affected these multi million/billion dollar companies profits? That would be a big NO. The crap food was over priced prior to this. Not one of them has had any losses. They all could have afforded to give raises without this. But they are greedy . And quite frankly…do any of you really care? No. It’s just something else to complain about.
You miss the point. Most fast-food locations are franchises owned by small business people, not the “billion dollar companies” themselves. The “billion dollar companies” make their money from fees paid to them by the franchise owners. And the worker job losses are (and will continue to be) real.
Socialists again failed economy 101. This is not a socialist dictatorship so, they cannot force anybody to keep the work hours or remain in business. I feel sorry for the highschool and college kids that MADE some money while pursuing an education.
While some undocumented unskilled workers may be the intended beneficiaries of the legislation, acquaintances of mine are telling me that they are earning the same due to work hours loss (from 40 to 32).
If some of the business were looking for a excuse to close in this bag economy well, this is legislation opened a door for them .