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Industry groups say 10,000 jobs have been eliminated since Gov. Gavin Newsom signed a law that increased the minimum wage for fast-food workers to $20 an hour.
Today, the California Business Industry Alliance (CABIA) took out a full-page ad in the state’s edition of USA Today highlighting the negative impact of the recent minimum wage increase on California’s fast food restaurants.
The ads list mock “obituaries” for affected restaurants and denounce Governor Newsom’s signing of California Assembly Bill 1228, which raised the minimum wage for fast food workers to $20 an hour and created the Fast Food Regulatory Council, which has the power to raise the industry’s minimum wage annually.
Since AB 1228 became law last September, California fast food restaurants have cut nearly 10,000 jobs, equating to a 1.3% change from September 2023. The ad focuses on the numerous fast food chains across California that have been forced to raise prices, lay off employees and close locations, sending waves of anxiety throughout the state’s business community. Watch the ad here.
Tom Manzo, president and founder of CABIA, released the following statement:
“Unprecedented wage increases will have unprecedented consequences, especially in California, where the odds are already stacked against business. Rapid layoffs, rising prices and business closures are the direct result of Governor Newsom and this shortsighted legislation. California’s businesses and workers deserve to be treated better. We need policies that support growth and stability, not policies that put livelihoods at risk.”
Editor’s note – According to the ad:
Burger King – Drastically cut employee hours and introduced self-service kiosks. Bar Morno – Closed, noting that labor costs were once below 30% and are now approaching 40%. Cinnabon – Questioned whether it will remain designated El Pollo. Loco – Working to automate salsa making. Foster Freeze – Restaurant closures. McDonald’s – Reduced hours, possibly raising prices. MOD Pizza – Closed five stores. Pizza Hut – Laid off delivery drivers. Round Table Pizza – Cut 73 drivers, 21% of staff. Rubios – Closed 48 stores. Subway – Cut sandwich chain’s US operations by 443 locations.
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