Business groups claim hard-fought $20 hourly wage victory will cause reduced hours, layoffs and price hikes – critics say otherwise
As fast-food workers celebrated a pivotal wage increase to $20 an hour in California last week, an old economic debate was awakened by business groups and others claiming the increase will wind up hurting workers through reduced hours and layoffs, hurt customers with price hikes, and harm the franchise owners of fast food restaurants.
Their critics are not so sure.
The hard-fought wage increase to $20 an hour from California’s current minimum wage, $16 an hour, was a compromise to initial demands of $22 an hour with annual wage increases. Representatives of fast-food workers and the fast food industry came to a deal to avoid what would have been a costly ballot initiative over the passage and signing of the California fast food sector bill last year.
“Frontline workers like me organized, went on strike, and fought to pass a historic law that raises our wages and gives us a seat at table with some of the biggest fast food corporations in the world,” said Anjelica Hernandez, a McDonald’s worker in Los Angeles for nearly 20 years. “Even though we are the engine of a billion-dollar industry, too many of us struggle to keep with rent, our bills and the rising cost of living.”
If someone says that this will reduce hours, and cause layoffs, you know that they are bullshitting.
Why would they add to minimum wage increase and reduce their profit? Might as well declare bankruptcy.
As for prices, they usually are set not by how much it costs to produce something, but how much a customer will pay. They might increase prices if they are below the cost of production, but again they are dictated by the customer. If they can’t the business would go bankrupt.
They didn’t mention about going out of business, so it is kind of clear that this is a lot of hot air and they really just comparing about earning less.
There’s one thing I didn’t mentioned related to employees. It is automation that could replace them. The thing with that is that whenever they can, those companies would do that anyway.
Workers aren’t choosing their hours though so yes they can have reduced hours. The supervisor might also be told to do with less manpower. Its like how when you go to a small boba or coffee shop and there is 1 person doing everything.
As for automation that is almost 100% going to happen and is already happening. From automated server to burger flipper to drive thru attendant it’s all being tried.
You’re talking as if they weren’t working with minimum staff already. If they could cut staff more (even without this change) they would do so already.
Yeah, but again, this would happen with or without minimum wage increase. For the owners even if they would have to pay $6/hour that would still make them complain that it is too much.
What politicians should work on is to introduce tax on automation, and all the income from it should go toward UBI.