{"id":2210827,"date":"2024-04-01T17:11:02","date_gmt":"2024-04-01T21:11:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/californias-20-minimum-wage-law-takes-effect-causing-confusion-layoffs-and-price-hikes\/"},"modified":"2024-04-01T17:11:25","modified_gmt":"2024-04-01T21:11:25","slug":"californias-20-minimum-wage-law-takes-effect-causing-confusion-layoffs-and-price-hikes","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/californias-20-minimum-wage-law-takes-effect-causing-confusion-layoffs-and-price-hikes\/","title":{"rendered":"California&#8217;s Implementation of $20 Minimum Wage Sparks Confusion, Layoffs, and Price Increases"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">24<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fcalifornias-20-minimum-wage-law-takes-effect-causing-confusion-layoffs-and-price-hikes%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2210827&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>California implemented a $20 minimum wage law for \u2064fast-food workers, triggering confusion and disruptions. Pizza chains plan\u2064 layoffs, while franchisees\u2062 struggle to understand the law&#8217;s impact. Price hikes are anticipated. Governor Newsom signed \u200dexemptions, but uncertainty remains on its application. The law&#8217;s enforcement is unclear, leading to challenges for businesses. Layoffs\u2062 are increasing, and prices are \u2063expected to surge.  <\/p>\n<p class=\"readmore\">\n    <button onclick=\"showReadMore()\" id=\"readmorebtn\">Read more&#8230;<\/button>\n<\/p>\n<hr id=\"line\">\n<span id=\"more\"><\/p>\n<div>\n<p>California\u2019s $20 minimum wage for fast food workers became law Monday and quickly caused chaos, with pizza chains\u00a0preparing to cut hundreds\u00a0of employees, ice cream and pretzel shop franchisees\u00a0struggling\u00a0to learn if the law applies to them, and industry leaders eyeing\u00a0price hikes\u00a0in the state.<\/p>\n<p>California governor Gavin Newsom (D.) last week signed more carve-outs for the law, which already exempted bakeries and chains inside grocery stores, adding increased confusion over which franchisees must comply with the mandate.<\/p>\n<p>The chaos over the law could deal a political blow to Newsom, who became the face of negotiating the $20 fast food wage as a &#8220;compromise&#8221; between unions and business interests. Newsom, whose approval ratings <a href=\"https:\/\/freebeacon.com\/latest-news\/potential-biden-successor-gavin-newsom-at-all-time-low-approval-in-california-poll\/\" target=\"_blank\" rel=\"noopener\">have tumbled<\/a> in recent months, signed the legislation last September after a rushed and secretive process, but critics say the fallout is only beginning.<\/p>\n<p>It&#8217;s still unclear whom the law applies to. The owner of an ice cream franchise, for example, has tried for months to learn from Newsom and other state officials whether she has to pay her mostly part-time, high school and college student workers $20 an hour, KCRA <a href=\"https:\/\/www.kcra.com\/article\/ice-cream-franchisee-california-fast-food-labor-law\/60323916\" target=\"_blank\" rel=\"noopener\">reported<\/a> last week. The Democratic state assemblyman who wrote the law directed her to the Service Employees International Union (SEIU), one of the state\u2019s most powerful labor groups and the driving force behind the legislation, which ultimately told her to find a legislator to pass a new bill exempting her.<\/p>\n<p>&#8220;I think there\u2019s going to be a big backlash,&#8221; the state assembly\u2019s Republican leader James Gallagher said. &#8220;The whole thing is just making it more expensive to live in California.&#8221;<\/p>\n<p>Newsom\u2019s office declined to comment, but a spokesman has told other outlets that who\u2019s subject to the law will ultimately be decided by the state labor commissioner\u2019s office, a fast food council <a href=\"https:\/\/www.nrn.com\/workforce\/california-governor-names-fast-food-council-members\" target=\"_blank\" rel=\"noopener\">made up<\/a> of political appointees, and &#8220;potentially the courts.&#8221; The legislation\u2019s author, Democratic assemblyman Chris Holden, did not respond to a request for comment. The SEIU did not respond to a request for comment.<\/p>\n<p>Starting Monday, franchises are supposed to start paying $20 hourly to their workers and if they don\u2019t, can be taken to the state labor agency responsible for its enforcement. Yet many of these franchises do not know if the law applies to them. It\u2019s not clear, for example, if Panera Bread is exempt from the mandate even after allegations that Governor Newsom <a href=\"https:\/\/freebeacon.com\/latest-news\/gavin-newsom-under-fire-for-minimum-wage-carveout-that-benefits-donor\/\" target=\"_blank\" rel=\"noopener\">negotiated<\/a> a carve-out for chain bakeries to benefit a billionaire donor and former schoolmate who owns Panera franchises. Newsom denied the report after days of bad press and insisted that Panera didn\u2019t qualify as an exempted bakery after all\u2014a <a href=\"https:\/\/freebeacon.com\/california\/how-fast-food-franchises-are-pushing-back-on-newsoms-20-minimum-wage-law\/\" target=\"_blank\" rel=\"noopener\">claim disputed<\/a> by others in the industry that will likely need to be litigated in court.<\/p>\n<p>Chain ice cream parlors, pretzel counters, and doughnut shops are in the same boat.<\/p>\n<p>The state\u2019s department of industrial relations, which is tasked with answering the hard questions about the law, has issued a <a href=\"https:\/\/www.dir.ca.gov\/dlse\/Fast-Food-Minimum-Wage-FAQ.htm\" target=\"_blank\" rel=\"noopener\">fact sheet saying<\/a> that chain ice cream shops, pretzel and doughnut bakeries, and even boba tea joints may have to comply\u2014even though the federal government explicitly <a href=\"https:\/\/www.census.gov\/naics\/?input=722513&#038;year=2022&#038;details=722513\" target=\"_blank\" rel=\"noopener\">exempts<\/a> such places from its definition of fast food restaurants.<\/p>\n<p>Keith Miller, a California Subway franchisee and consultant to other fast food franchises, said ultimately, even if owners find technical exemptions, &#8220;I don\u2019t think it\u2019s a good feeling with your employees to say, \u2018I don\u2019t have to pay you $20.\u2019&#8221;<\/p>\n<p>Widespread layoffs in the industry are already underway because of the law, and fast food prices are set to rise\u2014as fast food corporations warned <a href=\"https:\/\/freebeacon.com\/california\/chipotle-will-be-more-expensive-in-california-next-year-as-minimum-wage-hike-takes-effect-cfo-says\/\" target=\"_blank\" rel=\"noopener\">investors months ago<\/a> would happen. Starting this month, pizza chains will permanently fire hundreds of workers, <a href=\"https:\/\/edd.ca.gov\/en\/jobs_and_training\/layoff_services_warn\" target=\"_blank\" rel=\"noopener\">state records show<\/a>. Jobs in California\u2019s fast food sector fell by 1.3 percent from last September\u2014when the law passed\u2014to January of this year, the <em>Wall Street Journal<\/em> <a href=\"https:\/\/www.wsj.com\/business\/hospitality\/california-restaurants-cut-jobs-as-fast-food-wages-set-to-rise-eb5ddaaa\" target=\"_blank\" rel=\"noopener\">reported<\/a>, compared to an overall 0.2 percent decline in private employment. This comes as California clocks the nation\u2019s highest unemployment rate at <a href=\"https:\/\/www.bls.gov\/news.release\/laus.nr0.htm\" target=\"_blank\" rel=\"noopener\">5.3 percent<\/a>, according to the latest federal figures, and has seen <a href=\"https:\/\/www.ppic.org\/blog\/why-have-us-and-california-jobs-numbers-diverged\/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=why-have-us-and-california-jobs-numbers-diverged?utm_source=ppic&#038;utm_medium=email&#038;utm_campaign=blog_subscriber\" target=\"_blank\" rel=\"noopener\">stagnating job growth<\/a> compared to the rest of the country.<\/p>\n<p>The legislation &#8220;will prove that the law of unintended consequences will always run amok\u2014and get ready for amok,&#8221; said Michael Lotito, a California attorney and co-chair of the Workplace Policy Institute.<\/p>\n<p>Lotito noted that the legislation was passed under SEIU pressure without any evaluation of how an unprecedented 25 percent minimum wage increase would affect food prices, labor costs, worker hours, hiring, business closures, and inflation.<\/p>\n<p>&#8220;I think that when you\u2019re in the fifth or sixth largest economy in the world \u2026 that is probably not the right thing to do,&#8221; he said.\t<\/p>\n<p>Miller said the legislation will test whether the small franchise model is sustainable and that the state likely won\u2019t see the full picture of who can stay in businesses until leases end. He noted that California\u2019s past minimum wage hikes have forced owners to keep staff as lean as possible, and it\u2019s unclear how they will manage the higher costs, now that additional price hikes may not be sustainable given already-high prices. The revenue-share model of franchises means that the fast food corporations will benefit most from higher food prices, without the pain of higher labor costs.<\/p>\n<p>&#8220;You\u2019re enriching the corporation and driving out your local business owner,&#8221; Miller said.<\/p>\n<\/p><\/div>\n<p><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>California&#8217;s new $20 minimum wage law for fast food workers went into effect on Monday, leading to chaos. Pizza chains plan to cut hundreds of employees, while ice cream and pretzel shop owners are uncertain if the law applies to them. Industry leaders are considering price increases. Governor Gavin Newsom recently approved additional exemptions for the law<\/p>\n","protected":false},"author":1604,"featured_media":2210828,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/freebeacon.com\/wp-content\/uploads\/2023\/01\/california-gov-newsom-and-west-coast-leaders-sign-climate-agreement.jpg","fifu_image_alt":"","footnotes":""},"categories":[544],"tags":[],"class_list":["post-2210827","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-free-beacon"],"fifu_image_url":"https:\/\/freebeacon.com\/wp-content\/uploads\/2023\/01\/california-gov-newsom-and-west-coast-leaders-sign-climate-agreement.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2210827","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1604"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2210827"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2210827\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2210828"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2210827"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2210827"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2210827"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}