Desperate Plea from California Business Leaders Over $20 Minimum Wage: ‘Fast Food Shouldn’t Be a Luxury’

By: Georgia | Published: Jun 14, 2024

California’s recent decision to hike minimum wages to $20 an hour for fast food workers has sent shockwaves through the industry. 

As business leaders react strongly, many point to adverse impacts on affordability and employment within the state.

Job Cuts Across the Board

Following the wage law signed last September, major chains from Pizza Hut to Burger King have reportedly slashed nearly 10,000 jobs. 

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A Burger King restaurant with a large crown-shaped sign and play area, under a clear blue sky

Source: Wikimedia Commons

This drastic cutback is a stark indicator of the broader implications of such financial adjustments on the fast food sector.

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Soaring Food Prices

In response to increased labor costs, fast food prices have soared. 

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Two traditional fast food hamburgers with lettuce, tomatoes, onions, and cheese, wrapped in paper

Source: Wikimedia Commons

Just this week, In-N-Out pushed the price of a Double Double meal past the $10 mark, edging the staple closer to “luxury” status.

Rubio's Feels the Pinch

Rubio’s Coastal Grill, a cherished name in Mexican fast food, couldn’t withstand the wage hike, leading to bankruptcy filings and the closure of 48 outlets in California. 

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A person in a Rubio's Coastal Grill uniform holding a plate of shrimp tacos garnished with avocado slices

Source: rubio’s/Facebook

The wage increase seems to be a double-edged sword, helping some while hurting others.

Business Leaders' Backlash

The increase has sparked outrage among business leaders, who have openly criticized Governor Gavin Newsom for pushing through the controversial law. 

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California Governor Gavin Newsom speaking at a podium with the California Democrats logo in the background

Source: Wikimedia Commons

They argue it’s an attack on companies striving to balance affordability with fair wages.

The Advertising Alarm

The California Business and Industrial Alliance made headlines with an advertisement in USA Today, featuring ‘obituaries’ for beloved brands impacted by the new wage laws. 

Front view of a MOD Pizza location featuring a clean, modern design with large windows and the restaurant's logo above the entrance

Source: Wikimedia Commons

It’s a creative yet grim portrayal of the current business climate.

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The Cost of Doing Business

Tom Manzo, president of CABIA, lamented the “increased cost and continued anti-business climate” in California. 

An outdoor dining area with glittering orange curtains and matching tablecloths under sunlight

Source: Mary Oloumi/Unsplash

His concerns highlight the struggle to maintain operational stability amidst rising expenses.

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Maintaining Fast Food's Affordability

“Fast food isn’t a luxury item,” said Tom Manzo, emphasizing that the essence of fast food is its affordability and accessibility. 

A box of McDonald's Chicken McNuggets on a wooden table

Source: Brett Jordan/Unsplash

This quote captures the industry’s foundational principle of providing economical food options to a broad demographic, which is now threatened by the increased wage costs.

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Detailed Ad Campaign

CABIA’s advertisement campaign also featured news clips documenting the various changes businesses have made in response to the wage increase. 

A Pizza Hut restaurant facade in an urban area, flanked by rows of parked scooters

Source: Wikimedia Commons

These included price hikes, employee layoffs, and in some severe cases, the closing of entire locations, showcasing the widespread effects of the policy across the state.

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McDonald’s Franchisee Adjustments

“A McDonald’s franchisee who owns 18 outposts in California is considering reducing store hours, hiking menu prices and delaying renovations to offset the impact of the state’s $20 hourly minimum wage for fast-food workers,” reported the trade group. 

A McDonald's meal with a Big Mac, fries, and packaging on a wooden table

Source: Brett Jordan/Unsplash

This example illustrates how businesses are being forced to make difficult decisions to remain viable.

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The Battle Continues

Despite the backlash, Manzo vows to keep advocating for small to medium-sized businesses that “don’t have a voice.” 

A diner table with an assortment of condiments including Tabasco sauce, ketchup, mustard, and sugar

Source: Mattia Bericchia/Unsplash

He remains hopeful that with continued effort, the business environment in California can be redirected.

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Newsom's Counterpoint

Contrasting the views of business leaders, Governor Newsom’s office reported an increase in jobs within the limited service restaurant sector, citing a rise of 4,500 jobs since the bill was signed last year and a total of 6,600 new fast-food jobs from April 2023 to April 1. 

Governor Gavin Newsom speaking passionately at a podium with a colorful, abstract background at a political event

Source: Wikimedia Commons

This data suggests a different perspective on the impact of the wage increase on employment within the industry.

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