“Devastating financial blow” – McDonald’s franchise slams Newsom’s fast-food law as “draconian” claiming it will cost “$250,000 per restaurant”

McDonald’s franchise group blasted California’s bill to increase wages for fast-food workers, claiming it will “result in a devastating financial blow.”

The new bill signed into law

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The new AB 1228 legislation, or the Fast Food Franchisor Responsibility Act, set a minimum wage rate of $20 per hour, making it the highest in the country. Governor Newsom said it was “a remarkable moment.” However, not everyone is happy with the new law.

Newsom justified the bill

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Image credit: Sheila Fitzgerald / Shutterstock.com

The Governor expressed that the idea that only teens work in the industry is untrue, saying, “That’s a romanticized version of a world that doesn’t exist.” He added, “We have the opportunity to reward that contribution, reward that sacrifice, and stabilize an industry.”

NOA blasted the new bill

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NOA, or the National Owners Association, represents over 1000 McDonald’s restaurants. The organization blasted the bill for its “draconian” rules. One of the rules includes the future increase of minimum wages.

NOA explained the shortcomings

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NOA said that 95% of California’s 1,300 McDonald’s restaurants are locally owned and operated by small business owners. Fox Business obtained the memo saying, “The new AB 1228 legislation has been voted into law and will result in a devastating financial blow to California McDonald’s franchisees at a projected annual cost of $250,000 per McDonald’s restaurant.”

It starts in April 2024

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Fast food workers must wait until April 2024 to receive $20 per hour. There will be a small bump on January 1, 2024, when the wave will rise from $ 15.50 to $16 per hour.

NOA’s fears

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The National Owners Association expressed fears that this could become a nationwide issue, Fox Business-obtained memo says, “We need to remain unified so that this can not gain a foothold anywhere else.”

Inside the controversial bill

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The law creates a Fast Food Council that can increase that wage yearly through 2029 by 3.5% or the change in averages for the U.S. Consumer Price Index for urban wage earners and clerical workers, whichever is lower.

Fast food workers are underpaid

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According to the U.S. Bureau of Labor Statistics, California’s fast food workers earn an average of $16.60 per hour, or a little over $34,000 per year, below the California Poverty Measure for a family of four.

The next topic will be healthcare workers

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The workgroup is working on creating a bill that would allow healthcare workers to gain $25 per hour over the next decade. Due to the Medicaid program, creating a proposal will be much more challenging.

Raising wages for fast food workers was a lengthy process

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Newsom commented it was “a tectonic plate that had to be moved,” which included over 100 hours of negotiations between the industry and the workers.

Newsom on book bans

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The Governor signed a bill to curb book bans. He stated, “Remarkable that we’re living in a country right now in this banning binge, this cultural purge that we’re experiencing all throughout America and now increasingly here in the state of California where we have school districts banning books, banning free speech, criminalizing librarians and teachers.”

Schools who break the law will be fined

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Schools that ban books based on sexual orientation or race will be fined. Boards had to follow anti-discrimination laws, but those requirements lacked financial penalties that will now be imposed.

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