Will Calif. Gov. Newsom sign bill raising minimum wage for fast-food workers?

I have known personally three people in my life who were fast-food franchise owners. (This was long before the pandemic-related wage pressures that caused many fast-food restaurants to nominally raise wages.)

The owners were all rich. Not “I own my own jet” rich. But “ginormous house with a pool and several expensive foreign cars” rich. “Extra house just for vacations” rich. “Send their kids of to pricey private schools” rich.

I knew none of them well enough to say to them at a party, “Don’t you feel guilty living the way you do and paying your employees so poorly that the rest of us — the taxpayers — have to pick up the slack by providing public assistance to them? Guilty that some of your people are paid so poorly that, even with just one kid, they qualify for government assistance, while you have a four-car garage and a pool? You couldn’t spare just a few more dollars per hour for not that many people on your staff?”

It would have been a rhetorical question, of course. None of them would have felt guilty because that’s just who they were.

Related to that, the California Legislature passed a bill that would, among other things, raise the minimum wage for many fast-food workers to $22 an hour starting next year.

The Wall Street Journal reports of the massive mobilization effort to get Gov. Gavin Newsom to veto the bill, even after the governor and his underlings have already significantly watered it down.

Restaurant operators and business advocates mobilized Tuesday to try to persuade California Gov. Gavin Newsom to veto a bill that would set wages for fast-food workers, a move they said could increase costs and set a precedent other states and cities might follow.

The effort is being pushed by franchise owners, including many who would have to take on the cost of paying workers a minimum wage as high as $22 an hour starting next year, set by a government-run council created by the bill. Chains that operate their own restaurants, such as Starbucks Corp., Chipotle Mexican Grill Inc. and In-N-Out Burger, would also be affected.

Groups representing restaurant companies and owners said they plan to launch an advertising campaign and deploy franchisees and business leaders to attempt to persuade Mr. Newsom, a Democrat, to veto the bill, which they say is the latest evidence of California making it difficult for businesses to thrive.

“Every resource at our disposal will be used to ensure our entire membership is asking the governor to veto this bill,” said Jot Condie, president of the California Restaurant Association. He said he fears the wage-setting council’s authority could later be expanded beyond the fast-food industry.

The bill, known as the Fast Act, passed California’s Legislature on Monday. It was backed by labor unions, which say a government council setting minimum wages for fast-food workers could create a model to ensure fair wages and other protections for hourly workers in an industry where unions have struggled to organize workers. this to other states,” said Mary Kay Henry, international president of the Service Employees International Union.

Fast-food franchisees have to be complete idiots not to be made fabulously rich by owning these restaurants. They can afford to pay higher wages and still make tons of money.

Aside from that, the costs to society of these restaurants is huge. There are the aforementioned facts about how much society picks up the financial slack — just as it does with Walmart, Target, etc. — when these fast-food employers pay so far below a living wage with few, if any , benefits. But there are also the health care costs of having these awful (delicious, but awful) restaurants everywhere, beckoning passesrsby to eat convenient, grossly unhealthy meals, the low price of which is subsidized by taxpayers everywhere — including the health care costs of treating all that diabetes and cardio-vascular disease.

So what if fast-food owners have to raise prices? That might mean fewer restaurants in the long-term which, overall, would not be a bad thing. But I suspect that even if every hamburger in California fast food had to be raised by a dollar to keep franchisees and their corporate overlords swimming in money, people would flock to the places because they’d still be cheap and fast and easy.

If you’re over a certain age, $22 an hour seems like a lot. But it’s really not, in today’s dollars. It’s a subsistence wage by today’s standards. Remember also that if the minimum wage had kept up with worker productivity, it would be $26 per hour.

You can read the rest of the WSJ article here.

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