Nearly 10,000 California fast food workers have been fired thanks to the state's new $20 minimum wage, according to the California Business and Industrial Alliance (CABIA), which slammed Governor Gavin Newsom for the law which went into effect April 1.
"California businesses have been under total attack and total assault for years," said Tom Manzo, CABIA president and founder in a statement to Fox Business, adding "It’s just another law that puts businesses in further jeopardy."
According to Manzo, nearly 10,000 fast food jobs have been cut across the state since Newsom signed Assembly Bill 1287 into law last year.
"You can only raise prices so much," he said. "And you’re seeing it. People are not going to pay $20 for a Big Mac. It’s not going to happen."\
CAIOBA took out this full page ad in Thursday's USA Today which includes mock "obituaries" of various fast food chains.
As we noted in April, thanks to the combination of inflation and minimum wage hikes driving up operational costs for businesses across the US, Larger chains raised prices but have also been forced to reduce employees and labor costs through automation, but the layoffs are just getting started.
"Restaurants are struggling to stay above water, and Democrats just threw them an anvil," California Assembly Republican leader James Gallagher told FOX Business. "We warned Democrats this new mandate would cost jobs. They ignored us, and here we are with the highest unemployment rate in the country poised to get even worse."
The "digital options" that many fast food franchises are referring to are automated ordering systems as well as robot workers which are slowly but surely becoming more cost effective than human laborers. At least one fast food location in California is testing a fully robotic restaurant with no human workers.
On the other side of the window, fast food has gone up an absurd amount. As FinanceBuzz noted recently:
- From 2014 to 2024, average menu prices have risen between 39% and 100% — all increases that outpace inflation during the given time period (31%).
- McDonald’s menu prices have doubled (100% increase) since 2014 across popular items — the highest of any chain we analyzed.
- Popeyes follows McDonald’s with an 86% increase, and Taco Bell is third at +81%.
- Menu prices at Subway and Starbucks have risen by “just” 39% since 2014 — the lowest among chains we studied. These are also the only restaurants where prices have risen by less than 50%.
McDevastating.
