McDonalds Presidents Says California FAST Act Will Kill Restaurants

The California FAST act – which would raise minimum wages up to $22 an hour for fast food workers – is on the back burner for now.

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

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

Opponents were represented by a group called Save Local Restaurants.

Similar Legislation Introduced in Virginia

Virginia’s House Bill 2478 was introduced January 20, 2023. Parts are identical to California’s AB257 – it would create a governmental fast food industry workers standard board, which would oversee wages and working conditions.

Virginia HB2478 is currently in the House Committee on Rules.

What is AB257?

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

1. Would create a 10-person, state-run council to negotiate wages, hours and working conditions for 500,000 fast food workers in California
2. Hourly wages could be up to $22 per hour, with capped annual increases.
3. AB257 would apply to restaurants with more than 100 locations nationwide.

Would Higher Wages Mean Higher Prices?

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

The increased prices would cause consumers to cut down their visits to the establishments, which could then lead to a reduction in employees, Erlinger feels.

Erlinger also questioned what he terms “final hour exemptions” which were tacked on to the existing legislation:

It would exempt restaurants with fewer than 100 locations nationwide.

It wouldn’t apply to restaurants that bake bread on site.

Erlinger said that he would supports “responsible increases to minimum wage.” But, he added, such increases should be applied to all industries and workers.

Image: Depositphotos

This article, "McDonalds Presidents Says California FAST Act Will Kill Restaurants" was first published on Small Business Trends