California Governor Gavin Newsom recently signed a bill that raises the minimum wage for fast food workers.
California Governor Gavin Newsom recently signed a bill that raises the minimum wage for fast food workers to $20 an hour and creates a council that can approve further increases. The bill, AB 1228, was hailed by labor activists and fast-food workers as a historic victory for their rights and dignity. However, we have serious doubts about the wisdom and effectiveness of this law.
Third, the law may create unfair and inefficient distortions in the labor market. The law applies only to fast food workers who work at chains with at least 60 locations nationwide, excluding workers in other sectors or smaller businesses that may have similar or worse working conditions. The law creates an artificial and arbitrary distinction between fast food workers and other workers, which may generate resentment and confusion among the latter.
Finally, the proposed increase in minimum wage at fast food restaurants could have unintended consequences for many restaurants that use minimum wage employees, such as fast casual or casual restaurants. These restaurants are already struggling to keep or find employees, and the increase in minimum wage could lead to many of these workers quitting their jobs and moving to fast-food restaurants.
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