Big Macs vs Big Labor — There’s been no shortage of takes on California’s fast food wages bill. You already know what each side thinks—pro-union folks are thrilled, while free market evangelists are livid.
The new law signed by Gov. Newsom will raise the minimum wage for fast food workers to $22, but only for chains that have over 100 locations across the country.
Fans of the law point to a louder voice for fast food workers, who’ve long been at the bottom of the labor hierarchy. Despite efforts over decades to improve their conditions, these workers have been sent to the back of the line repeatedly.
Since most fast food locations are operated by franchisees, organizing is only possible across the locations that the franchisee owns, which is typically single digits or less. This new law allows wider bargaining power that workers in other industries enjoy.
On the other hand, critics are pointing to small restaurants that will get burned. If McDonald’s is paying its workers $22, why would someone go to the mom-and-pop across the street paying $15? These shops can barely find workers as is.
Plus, with groceries and gas already inflated as f*ck, does the economy need more expensive fast food too? Having fewer items on the dollar menu disproportionately affects those at the bottom of the income ladder.
At the end of the day, California is putting its thumb on the scale to improve conditions for workers and address its income inequality, which is among the top five worst in the country.
Best case scenario: these workers gain increased spending power and boost the economy and tax revenues as a result.
Worst case: fast food companies either pass on higher costs to customers, worsening inflation, or replace workers in large numbers with robots.
If this model works in the world’s fifth-largest economy, expect other states to follow suit.
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