California�s new law raising the minimum wage for fast food workers to $20
per hour has drawn heavy criticism for its potential consequences.

While intended to help low-wage workers, the higher costs are likely to
force restaurants to cut jobs, reduce hours, increase automation, and
raise prices on menus.

�A study by the nonpartisan Congressional Budget Office last December
found that raising the federal minimum wage to $17 an hour from $7.25 by
July 2029 could increase wages for more than 18 million people, but also
could reduce employment by about 700,000 workers,� the Journal wrote.

Some fast food businesses have already started shedding employees ahead of
the law taking effect.

Research indicates higher minimum wages can boost some wages but also lead
to job losses.

�Higher wages would increase employers� costs, raise prices for consumers
and depress some demand, the CBO found. Some employers would also turn to
technology to try to reduce their reliance on low-wage workers,� the
Journal reported.

�California had 726,600 people working in fast-food and other limited-
service eateries in January, down 1.3% from last September, when the state
backed a deal for the increased wages,� they reported. �Total private
employment in the state declined 0.2% over that period, according to state
figures.�

Critics argued the high wage mandate will make it difficult for
restaurants to stay in business and take on new hires, ultimately hurting
many of the workers it aims to help through unintended consequences that
were foreseeable.

�Many California restaurant operators are looking for other ways to cover
the cost, like reducing hours, closing during slower parts of the day or
serving menu items that take less time to make,� the Journal wrote.

�I can�t charge $20 for Happy Meals. I�m leaving no stones unturned,�
McDonald�s owner Scott Roderick said.

https://www.stateofunion.org/2024/04/11/numerous-employees-encounter-
layoffs-reduced-hours-as-californias-controversial-new-minimum-wage-law-
takes-effect/