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Saturday, June 3, 2023

McDonald’s CEOs Say California’s FAST Law Will Kill Restaurants

California’s FAST law, which would raise minimum wages up to $22 an hour for fast food workers, is on the back burner for now.

McDonald’s Chairman Joe Erlinger said the FAST Act, legislation known as AB257, would make it “impossible to run local small business restaurants.”

California’s AB257 passed in the fall of 2022, but more than 1 million opponents signed a petition requiring the matter to be put to a vote. California voters will make their views known in November 2024.

Opponents were represented by a group called Save Local Restaurants.

Similar legislation introduced in Virginia

Virginia House Bill 2478 was introduced on January 20, 2023. The parts are identical to California’s AB257: it would create a standard government fast food industry workers’ board, which would oversee wages and Labor conditions.

Virginia HB2478 is currently on the House Rules Committee.

What is AB257?

Proponents of the legislation call AB257 the Workers’ Bill of Rights. What are the key parts?

  1. It would create a 10-person state council to negotiate wages, hours and working conditions for 500,000 fast food workers in California.
  2. Hourly wages could be as much as $22 per hour, with limited annual increases.
  3. AB257 would apply to restaurants with more than 100 locations across the country.

Would higher wages mean higher prices?

According to McDonald’s Chairman Joe Erlinger, the increase in hourly wages for employees would increase the cost of quick-service restaurant meals by 20% or more.

The price increase would cause consumers to reduce their visits to the establishments, which could lead to a reduction in employees, Erlinger believes.

Erlinger also took issue with what he calls “last minute waivers” that were added to existing legislation:

It would exempt restaurants with fewer than 100 locations nationwide.

It would not apply to restaurants that bake bread on site.

Erlinger said he would support “responsible increases to the minimum wage.” But, he added, such increases must apply to all industries and workers.

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Image: Depositphotos

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