Lone Candle
Champion of Truth
California fast-food franchise owners, consumers feel brunt of minimum wage hike
https://finance.yahoo.com/news/california-fast-food-franchise-owners-consumers-feel-brunt-of-minimum-wage-hike-174515934.html
“if it’s win-win, why just make the minimum $20? Why not $30? Or $100?
Because government requiring higher wages is not a win-win.
Interfering with market prices always creates nasty unintended consequences.”
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“No. 1: Thousands of Californians have already lost jobs because some restaurants closed. Others lost income because their employer cut worker hours. The chain El Pollo Loco cut employees’ hours by 10 percent.
Pizza Hut announced that they will lay off more than a thousand delivery drivers. One such driver, Michael Ojeda, understandably asked, “What’s the point of a raise if you don’t have a job?”
No. 2: Workers who still have jobs will lose them because now their employers have more incentive to automate. Chipotle just created a robot that makes burrito bowls. Even CNN acknowledged, “Some restaurants are replacing [fast food workers] with kiosks.”
No. 3: Prices go up.”
https://reason.com/2024/05/29/californias-20-fast-food-minimum-wage-law-is-already-having-disastrous-unintended-consequences/
“The unions are claiming a victory for workers, but it’s not hard to guess the result. Higher prices will mean fewer customers and reduced profits. That means fewer restaurants and fewer jobs. Although the legislation only applies to fast-food chains with more than 60 outlets, it will drive up costs for mom-and-pop restaurants. They will have to compete for workers with chains that must pay a much-higher wage.
That’s not the only bad news. “Making it illegal to pay less than a given amount does not make a worker’s productivity worth that amount—and, if it is not, that worker is unlikely to be employed,” wrote famed economist Thomas Sowell. In other words, restaurants will not hire people who aren’t productive enough to justify the wage.”
https://reason.com/2023/11/24/californias-war-on-fast-food-jobs/
“B 1228 applies to fast-food chains with at least 60 locations nationwide — except for those that make and sell their own bread. The bill’s landmark change is a minimum wage hike to $20 per hour, almost $5 higher than the Golden State’s minimum wage of $15.50.
It would also see the establishment of a Fast Food Council to set wages and make recommendations for working conditions. The council has the power to increase the new minimum wage each year through 2029 up to 3.5% or the average change in the Consumer Price Index for urban wage earners, whichever is lower.
One key part of the bill has been removed since its proposal. Previously, AB 1228 would have made fast-food corporations jointly liable if franchisees committed labor violations, which the NOA believes could have led to “frivolous lawsuits against franchisees” that would then force the larger corporate head offices to exert more control over local operations.”
https://finance.yahoo.com/news/devastating-financial-blow-mcdonald-franchisee-163000954.html
“The battlefront starts with so-called “joint employer” or “joint liability” standards, which the National Labor Relations Board (NLRB) is expected to officially impose soon. This would essentially require franchisee employees to be counted as employees of the franchisor parent corporation by holding the franchisor liable for the actions of its individual franchisees. It also would make it easier for unions to organize at the parent company level, rather than via individual franchise outlets. Progressives have been pushing for years to impose joint employer standards onto the franchise model, and the Biden administration is echoing the Obama administration in following through (after a brief hiatus during Donald Trump’s presidency).”
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“Left-leaning policy makers are not stopping at the federal level, either, as states like California are also considering joint liability bills. Last year, when California passed its controversial FAST Recovery Act, which not only raised minimum wages for restaurant workers to $22 an hour but also created a 10-member Fast Food Council to oversee and regulate the entire industry, the legislation also included new joint liability rules.
The joint liability language was removed from the bill before it passed, but once the franchise and restaurant industry fought back by getting a referendum for the FAST Act to qualify for the 2024 ballot, liberal state lawmakers suddenly reintroduced a stand-alone joint liability bill. The joint liability idea is already spreading beyond the Golden State—ironically known as the birthplace of fast food—to states such as New York.”
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“Being the proprietor of a franchise has long been seen as one of the preeminent—and most readily accessible—ways to achieve the American dream. Franchise ownership often requires lower startup capital compared to other types of businesses and provides training in the requisite expertise and knowledge needed to operate the business.
As a result, the franchise model is recognized as providing more opportunities for those in underrepresented communities. This is reflected in the ownership numbers, as 30 percent of franchises are minority-owner compared to only 18 percent of other types of businesses. Some have even called the franchise system “the safety net of the economy,” since a recently laid-off worker in an unrelated sector can turn around and buy a franchise and receive the guidance needed to succeed.
According to the International Franchise Association, the Obama-era version of the joint employer standard cost franchises over $33 billion annually and resulted in 376,000 lost job opportunities. Perhaps most alarmingly, it led to an over 90 percent increase in litigation against franchises.”
https://reason.com/2023/09/15/the-war-on-fast-food-joints/
https://www.vox.com/policy-and-politics/2022/8/15/23296481/fast-food-ab257-california-sectoral-labor-unions