California giant McDonald’s franchisees oppose Gov. Gavin Newsom’s (D-Calif.) new minimum wage law that would require fast-food restaurants to pay workers at least $20 an hour, and will respond to increases. claims that menu items become “out of reach.” wage.
Kelly Harper Howie, a Los Angeles-based franchisee who with her sister owns 21 McDonald’s restaurants in the state, said trying to follow federal guidelines reduces profits. California Fast Food Councilwhich Newsom created in 2023.
said Harper Howie, who employs more than 1,000 people in the state. KTLA5 that Assembly Bill 1228 It makes no economic sense for workers or business owners.
“As business owners, we don’t oppose raising the minimum wage,” she explained, noting that many of her restaurants are in low-income cities like Compton and Inglewood.
“One of our main objections is that this wage increase applies only to us,” she continued. “basically, [the current] Are wages not enough for people to live? So who are the customers who can pay for their food?”
The $20 minimum, which goes into effect April 1, is a 25% increase over the state’s current minimum wage. The Fast Food Council also has the following features: increase According to Business Insider, it’s increasing by up to 3.5% every year.
“Increasing menu prices is not the only thing we’re doing, because the reality is we can’t raise prices enough,” Harper Howie said.
“That would be out of reach.”
The executive went on to explain that there are other cost-cutting methods that can be done “behind the scenes,” but at the end of the day, “costs go down…”[which] It means lower profitability for us, but we absorb it. ”
The progressive bill gained support from Democrats in the California State Assembly before Newsom signed it in September 2023. Newsom touted the bill as a policy that will “ensure these workers receive the fair wages they deserve.”
NEW: Fast food workers in California will be paid the highest minimum wage of any state in the country.
I just signed legislation to ensure these workers receive the fair wages they deserve. https://t.co/lWbQhHKWaF
— Gavin Newsom (@GavinNewsom) September 28, 2023
The law applies to “limited-service restaurant chains with at least 60 locations nationwide,” but also includes franchisees with fewer locations, Insider reports.
To offset the financial impact of the law, franchisees of the California-based chain Fatburger previously said they would reduce employee hours and vacation time and lower prices at the four restaurants it operates from around 8. He complained to the store that he had to raise prices by 10 percent.
