Many think that California’s far-left lawmakers have further harmed the low-income individuals they professed to be assisting by passing a law that is forcing multiple thousands of people to lose their employment.
The passage of Assembly Bill 1228 in California has the unfortunate effect of making individuals lose their employment rather than becoming better off financially. This is because the law mandates a sudden and drastic increase in the minimum wage for most fast-food establishments.
There are more than half a million fast-food employees in the state, and many of them are now facing job losses because of the state’s new $20/hour minimum wage. In response, business owners have cut costs by eliminating expensive human staff and replacing them with automated ordering gadgets.
A new pay raise has been implemented after the devastating COVID shutdowns, which wiped out businesses and plunged profit margins. It has been a heavy burden for California’s eateries, which were just beginning to recover.
Burger King franchisee Harsh Ghai said the new pay law is expensive. Ghai announced that he would install computerized ordering kiosks at all 140 restaurants within two months. Although prices typically only increase by roughly three percent annually, fast food costs for consumers have increased by ten percent in the last year.
Ghai said he would add computerized self-ordering kiosks to his 140 sites in a few months rather than spreading them out over a decade as originally planned.
Other fast-food franchises have laid off hundreds of workers each. Following the start of the new law on April 1st, nearly two thousand pizza delivery drivers were laid off from places such as the Southern California Pizza Co. and Pizza Hut.
According to a former Foster’s Freeze owner from Lemoore, California, who recently went out of business, small companies simply cannot afford the 120% minimum wage hikes that have occurred over the last decade. Raising the hourly rate clearly isn’t helping, as we’re all worse off financially now than we were a decade ago.
In response to the increased expenses, some restaurants have gone out of business altogether. Other businesses are considering a move to spaces that don’t have a dining room or cash registers.
