By Daniel Walker April 5, 2024
In-N-Out Burger
The new minimum wage law in California has set a $20 per hour minimum wage for fast-food workers.
CBSIn-N-Out Burger saw burgers go up 25 cents and soft drinks by 10 cent.
California's $20 minimum wage hike
pixabayThis has led to price increases in many chains to offset the higher labor costs.
Increased prices
pixabayThe New York Post reported that many chains in the state have already increased their prices. The Post reported, “The law applies to restaurants offering limited or no table service and which are part of a national chain with at least 60 establishments nationwide.”
Burger King
pixabay"The Texas Double Whopper meal at Burger King went from $15.09 on March 29 to $16.89 by April 1," the report found. "The Big Fish Meal went up from $7.49 to $11.49, with other items on the menu going up by 25 cents to $1."
Hart House
YoutubeHart House, owned by actor and comedian Kevin Hart, increased all milkshake prices, sandwiches by 50 cents, and large fries were increased to $5.99.
Not yet raised prices
pixabayWhile some chains like Chick-fil-A, McDonald’s, and Wendy’s have not yet raised prices, others have adjusted menu items.
Job cuts
pixabayThe wage hike may lead to potential job cuts and increased workload for remaining employees, impacting both workers and consumers.
Economic implications
pixabayThe economic implications of such wage increases are complex, with potential consequences for the overall economy that Gov. Newsom may not fully grasp.
Gov. Gavin Newsom
pixabayCalifornia Democrat Gov. Gavin Newsom, said, “This is a big deal. … Eighty percent of the workforce are people of color, two-thirds are women, the majority are breadwinners. And we have the opportunity to reward that contribution. Reward that sacrifice."
Primary concerns
pixabayOne of the primary concerns associated with minimum wage laws is the potential for job displacement and increased unemployment, particularly among low-skilled workers. Studies have indicated that higher minimum wages can lead to reduced hiring, automation, and workforce contraction, particularly in industries reliant on low-wage labor.
Small businesses
pixabayThe imposition of higher minimum wages can pose significant challenges for small businesses, particularly in sectors with narrow profit margins.
Increased operating costs
pixabayThe increased operating costs resulting from elevated wage mandates can strain the financial viability of small enterprises, leading to closures, reduced hiring, or inflation-induced price adjustments.
Engender wage compression
pixabayMinimum wage escalations can engender wage compression, wherein workers with skills and experience marginally above the minimum wage level demand higher compensation, leading to upward wage pressures and increased labor costs across the board. This phenomenon can pose challenges for employers and contribute to inflationary wage dynamics.
Inflationary pressures
pixabayThe implementation of higher minimum wages has the potential to fuel inflationary pressures, as businesses pass on increased labor costs to consumers through elevated prices for goods and services.
Power of wages
pixabayThis inflationary ripple effect can erode the purchasing power of wages, particularly among lower-income households, thereby exacerbating the very income inequality minimum wage laws seek to address.
Unintended consequences
pixabayThe unintended consequences of minimum wage laws can disproportionately impact marginalized workers, including minority groups, youths, and individuals with limited work experience.
Reduced hiring
pixabayHigher minimum wages may lead to reduced hiring and increased barriers to entry for these vulnerable demographics, perpetuating socio-economic disparities.
Workforce inclusion
pixabayElevated minimum wages can impede workforce inclusion by limiting entry-level job opportunities and skill development for individuals entering the labor market. This can hinder career advancement, skill acquisition, and economic mobility, particularly for those seeking to gain a foothold in the workforce.
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