Business groups claim hard-fought $20 hourly wage victory will cause reduced hours, layoffs and price hikes – critics say otherwise

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.”

  • takeda@lemmy.world
    71·
    5 months ago

    Business groups claim hard-fought $20 hourly wage victory will cause reduced hours, layoffs and price hikes – critics say otherwise

    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.