Approximately 10,000 jobs have reportedly been slashed at California fast food eateries after the minimum wage was hiked to $20.
Gov. Gavin Newsom’s (D) law to pay workers $20 an hour went into effect on April 1 and has apparently taken a devastating toll on the industry, Fox Business reported Wednesday.
The California Business and Industrial Alliance (CABIA) said nearly 10,000 jobs have been cut across fast food restaurants since Newsom signed California Assembly Bill 1228 into law last year. To highlight what it says are the unintended consequences of the law, CABIA has taken out an ad in Thursday’s statewide edition of USA Today with mock “obituaries” of popular fast food brands. … CABIA’s ad highlights multiple restaurants that have had to raise prices and lay off workers to stay afloat and, in some cases, shut down stores. The ad features news clips documenting changes made by brands like El Pollo Loco, Subway, and Burger King across the state. “California businesses have been under total attack and total assault for years,” CABIA president and founder Tom Manzo told FOX Business. “It’s just another law that puts businesses in further jeopardy.”
In order to offset the increased wages, several restaurant chains such as McDonald’s, Burger King, and In-N-Out Burger raised their prices, the New York Post reported on Thursday.
A California McDonald’s franchisee criticized Newsom’s minimum wage law in March, according to Truth Voices, saying the menu would be “unaffordable” if items on it were scaled to the updated wages.
In April, the outlet reported that fast food prices in California jumped during the six-month period before the state mandated the $20 minimum wage, a study found.
Meanwhile, another fast food franchisee in the state, Harsh Ghai, explained that he was rushing to install kiosks at his restaurants to save money as the $20 minimum wage took effect.
“Ghai said he is trying to offset the raised wage by cutting employee hours, doing away with overtime, holding back on opening additional locations, and installing kiosks,” the article stated.
