by Martin Armstrong, Armstrong Economics:
Effective April 1, fast food workers in California will receive a minimum wage of $20 thanks to a new law signed by Governor Gavin Newsom. This law does not extend to all minimum wage workers, only those at fast food establishments. Why? Newsom needs to buy votes and labor unions and chain restaurants have been battling it out to determine who must pay.
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Fast food lobbyists spent $4 million in the first six months of this year to prevent the California Accountability Bill from passing. The bill would hold franchisees and their parent companies jointly liable for the treatment of workers. Taco Bell, Pizza Hut, Jack in the Box, KFC, McDonalds, Chic-fil-A, and basically all of the fast food chains separately spend money to defeat bill AB 1228. Commercials appeared across California of seemingly desperate franchise owners saying their businesses were in danger if the big bad corporation had to take over.
That bill will not be on the ballot for 2024, thanks to this new boost in pay. California currently has one of the highest minimum wage brackets in the country at $15.50. Critics say that these jobs are intended for students who live at home and need work experience. “That’s a romanticized version of a world that doesn’t exist,” Newsom said. “We have the opportunity to reward that contribution, reward that sacrifice and stabilize an industry.”
Other labor unions are certain to follow and demand higher wages. Fast food prices have spiked in recent years and can hardly be considered cheap. Unskilled laborers vote Democrat, and the big chains will put money behind Democratic candidates who support their interests. At the same time, most fast-food chains have begun to automate positions and cut down on hiring.
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