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In a significant blow to California’s fast food sector, nearly 10,000 jobs have been cut since the state implemented a $20 per hour minimum wage for fast-food workers on April 1, 2024.
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Sacramento, CA – California's fast food sector has been hit hard following the implementation of a new minimum wage policy. The state has seen nearly 10,000 jobs eliminated across fast food restaurants since the law took effect on April 1, 2024. This drastic reduction in workforce comes as businesses grapple with the economic impact of the mandated $20 per hour minimum wage for fast-food workers, established by California Assembly Bill 1287.
Governor Gavin Newsom signed the bill into law last September, aiming to provide better financial support for fast-food employees. However, the increase has led to significant challenges for the industry, with many businesses citing unsustainable operating costs as the primary reason for job cuts and closures (Hoover Institution) (MRCTV).
Major chains like McDonald’s, Burger King, and In-N-Out Burger have responded by raising prices and reducing employee hours to offset the increased labor costs. The California Business and Industrial Alliance (CABIA) reports that this wage hike has forced some establishments to close entirely, including notable closures like Rubio’s Coastal Grill, which shuttered 48 of its 134 locations and subsequently filed for bankruptcy.
The law also established a fast-food regulatory council with the authority to further increase the industry’s minimum wage annually. Critics argue that while the intention behind the wage hike was to improve worker livelihoods, it has inadvertently made fast food less accessible due to higher prices, with a significant portion of consumers now viewing fast food as a "luxury" purchase.
This policy change reflects broader economic and political debates over minimum wage laws and their impacts on employment and business viability, particularly in sectors like fast food that operate on thin margins. As the situation unfolds, both workers and employers are navigating the new economic landscape shaped by this historic wage policy.
Business
Michael Kelly is the founder and CEO of Candlestick Media and Trendline News. He's a software developer by trade who took a liking to entrepreneurship after graduating college. He founded Trendline News in July of 2023.
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