Can California afford to Lose McDonald’s franchises in favor of Assembly Bill 257?

Union-backed AB 257 recently passed in the California state senate. Sen. Shannon Grove expresses concern for impacted families and the future of fast-food chains in the state of California.

Assembly Bill 257, sponsored by twelve Sacramento Democrats, passed in the state Senate and Assembly on Aug. 29, setting new rules for fast food outlets and franchises. It will now go to the governor’s desk.

The bill calls for the establishment of a 10-member Fast Food Council within the Department of Industrial Relations until Jan. 1, 2029. The council will establish minimum wages, working hours and other working conditions to reflect the minimum standards for fast food restaurant employees, with health, safety, and employment standards up for review every three years.

The bill makes allowance for a county or city with a population of over 200,000 to create a local fast food council of its own, to provide recommendations to the 10-member council.

The bill allows for a minimum wage increase no greater than $22 in 2023, with increases up for consideration from 2024.

Sen. Shannon Grove, a Republican, opposed the bill voicing concern that families already facing record high inflation would see increased prices in “tens of thousands of establishments” in salad bars, yogurt shops, burger houses, and restaurants which feed these families.

McDonald’s, one of the largest fast-food employers in the United States, with the largest number of outlets in California, could be greatly impacted by the passage of this bill.

“McDonald’s came into my office and said they’d leave the state or stop franchising in the state. Can we really survive without the golden arches? I mean, think about that for just a second,” Grove said.

McDonald’s outlets employ on average, anywhere from 8-25 workers per shift, depending on the size of the outlet. As of Aug. 22, California boasts 1,187 locations in the state. Can we really afford to lose McDonald’s as an employer for unskilled labor?

Perhaps McDonald’s has sensed this change coming for some time now. The recent past, filled with debates on whether fast-food outlets like McDonald’s should pay a livable wage or are just stepping-stone jobs to transient students has been forefront in the unskilled labor debate. And while the number of McDonald’s restaurants across the globe has continued to rise, the number of people it employs has seen a steady decrease over the past five years.

While the bill promises higher wages for employees, it may very well compound the woes of the very people it hopes to serve if fast-food chains opt out of California, leaving fewer tables at which to sit.

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