In the name of equity or some other progressive god, the State of California embarked on a pilgrimage to the minimum wage holy land. A search for a price-point on an hour of labor most likely to accumulate Democrat votes without any regard for the cost to voters.
For years, it was the fight for 15. Get the minimum wage to 15.00 per hour. But no one can afford to live on that in a progressive-run economy, so these days, the number is much higher. California, a leader in bad progressive ideas, has upped the ante.
In mid-October, the state of California enacted a new minimum wage law which will push the hourly rate to at least $16. This brings it up by $0.50 — the previous state standard had been $15.50 per hour, and will remain so until the bill goes into effect on Jan. 1, 2024. …
But there’s a catch. The law ensures all fast food workers — including those at McDonald’s and the like — will be paid $20 per hour, effective April 1, 2024. And a newly-established California fast food council may raise the rate again after January 1, 2025, according to the California Labor & Employment Law Blog.
McDonald’s CEO Chris Kempczinski shared thoughts about how that would impact their business. It will demand higher pricing. He never mentions more automation, but that’s always been a component of addressing political overreach on the value of labor. Businesses look for ways to cover the increased cost of doing business. Impacts include fewer employees, fewer full-time employees, changes to hours of operation, reduced benefits, menu options, and price increases.
While Kempczinski doesn’t necessarily agree with Newsomism’s impact on the cost of labor, he does see it as an opportunity. McDonalds is huge. It can more easily adjust its stride to compensate. Many of its competitors cannot.
“Longer term, what we’ve been talking about with our franchisees is this is an opportunity for us to gain share because this is an impact that’s going to hit all of our competitors. … We believe we’re in a better position than our competitors to weather this,” he added.
He is not wrong. Califorina’s effort to lift people will do the opposite. There will be fewer entry-level jobs as smaller operations get wiped out, fewer jobs in total. Those who get work will work less and end up with less despite the state hiking the hourly pay rate. The broader impact on the economy will affect other businesses with a more significant net loss of wealth.
But Mcdonald’s will still be there.
HT | MSN
