Not opposed to raising minimum wage, but this law seems oddly specific, and has fairly goofy exemptions. We're going to see the usual side effect of businesses changing their behavior to become exempt.
> Restaurants that operate a bakery that "produces" and sells "bread" as a stand-alone menu item as of September 15, 2023, and continue to do so are exempt from the new law.
Not "goofy" at all, perfectly rational -- once one learns that Panera is a contributor to Governer Newsom's political campaigns.
Panera was never going to be exempt, their dough is trucked in every day.
They hire from the same pool of labor as fast food franchises anyways. Actual, proper bakeries are a bit different and more incestuous IME, I think it’s the odd working hours.
More that they have essentially attempted to define "large fast food chain", including what's effectively a definition of fast food.
Companies can potentially escape the law by providing more than "limited service", or splitting the company so they have fewer than 60 locations, or selling food that requires some preparation by the customer.
> Not opposed to raising minimum wage, but this law seems oddly specific, and has fairly goofy exemptions. We're going to see the usual side effect of businesses changing their behavior to become exempt.
Probably not, since part of the reason it is so specific is that it preempts local targeted (industry-specific as opposed to general) minimum wage laws. So trying to wiggle out around the boundary of the law would potentially expose a chain to having to deal with different targeted minimum wage laws in multiple CA jurisdictions.
> Several fast-food executives have suggested prices would go up 2.5% to 3.5% to offset higher wages; Jack in the Box, Starbucks, McDonald's and Chipotle have all warned of upcoming price hikes.
So I guess a frapuccino would go from $4 to $4.12.
I can't speak to coffee but fast food has already gone up in price sharply relative to higher tiers of food. There's no room to raise prices further without a lot more people noticing that it's absurd to get a combo from McDonald's or Taco Bell now that the contract (worse food but cheaper) has been broken.
In the most pedantic sense no. Inflation can technically only be created by increasing the money supply artificially. However this has a similar effect venue it applies unneeded artificial pressure to a free market.
This is also happens to be easy way to buy votes, using none of your own money, and has been a tried and true political play for many decades.
> In the most pedantic sense no. Inflation can technically only be created by increasing the money supply artificially.
This is the definition of “monetary inflation” rather than the more common “consumer price inflation” that everyone who isn’t a particular kind of crank means when they use “inflation” unmodified in general use (rather than internally in a very specific academic/research community.)
> However this has a similar effect venue it applies unneeded artificial pressure to a free market.
“Free markets” do not, and cannot, exist in the real world; they are not merely an idealized concept, but actually one that requires assuming contradictory things.
> This is also happens to be easy way to buy votes, using none of your own money, and has been a tried and true political play for many decades.
The long series of advocacy from multiple sides, early legislation, referenda against that legislation, and labor, industry, and government negotiations to reach a mutually tolerable resolution that resulted in this law can be described as many things, but “an easy way” to do anything is not one of them.
(The initial minimum wage increase is a tiny part of the law, whose main function is setting up a new industry regulatory authority with labor, franchisee/restaurant owner, and franchisor/chain owner representation, with general statewide regulatory authority over industry working conditions in the state.)
True, it should be modeled as an input commodity adverse price shock -- as if the prices of some other essential, say wheat or potatoes had jumped by 30% -- though only for restaurants that fit the criteria.
It will likely result in a cut in hours for marginal workers, boosted hours for higher productivity workers and more outsourcing/automation.
Labor intensive restaurant operations will have a competitive disadvantage to capital intensive models, and so we’ll see more capital intensive ones thrive.
The minimum wage in California is already $16, so this is only a 25% increase for this subset of an industry. This is equivalent to increasing the minimum wage to $9 in other states.
Fast food work has long been denigrated as a low-pay dirty job predominantly staffed by teenagers and under-skilled under-privileged workers who lack better job opportunities.
In the California zeitgeist this makes pro-fast food worker action politically irresistible. This is actually a compromise agreement reached after an earlier bill[0] was passed and fast food franchisees threatened to run a ballot proposition to get it repealed.
Basically, politics is how we determine who gets what part of the pie. Fast food workers are sympathetic and politically powerful right now. They simply have more political power than other minimum wage workers and they are now cashing in on that political power.
The short version is “Large fast-food chains” – (the definition in the law restricts this to large chains) – “are plagued by a bunch of common pervasive issues, including wage and hour violations, and are structured in a way that is an effective hack around the normal method of accountability for violations, so industry-wide regulation of wages, working conditions, etc., with representation of the industry, franchisees, workers, and worker advocates, and the non-industry-affiliated public has been deemed necessary, with an initial industry-specific boost in minimum wages attached to that.”
The longer answer is…well, research the history of the California FAST Act, which this updates/replaces, and AB 1228/2023 (the law here), and the negotiations by which the industry referendum against the former was withdrawn in exchange for the rewrite of the latter that was then adopted.
I'm curious to see how this plays out. It seems like there are a lot of lower paying jobs available and that stores are understaffed. I've also heard that the people working those types of jobs are having trouble getting enough hours. As someone who isn't very keyed in to this its hard to tell what's going on. Either way, its got to be hard to live in California on $20/hr.
They don’t get enough hours because the employers don’t want to be responsible for their healthcare. It’s cheaper to keep someone below 30/hr week than it is to let them go above that and quality for full-time benefits.
>because the employers don’t want to be responsible for their healthcare.
An argument for some kind of baseline, nationalized health insurance. Removes that burden from Employers and they can then turn to the far cheaper option of employing them for an extra 10 - 20 hours a week + raises.
Employers can use insurance benefits as hiring incentives, further creating better competition in the market for employees.
Expect fast food companies to just pass this onto consumers or leave California. California legislators should be required to read an economics book or at least consult with business leaders. Oppressed vs oppressor mentality, and buying of dem votes.
One silver lining about the pandemic is the cat is out of the bag how robust the economy is despite what MBA's, economists, and rentier billionaires would have you think. And political leaders are now well aware of the bill of goods they were sold by those knuckleheads.
my dear guy, you really need to spend some time this year and learn economics and i dont say this in a vile or mocking way but you will understand why a burger flipper cannot making 1000$ per hour unless everyone else is making 2000$ per hour after you finish an economics course
I would think politicians would need to understand economics considering they are making policy.
Effectively, it is illegal for two consenting adults to agree to $19/hour in exchange for work. They can have sex, drink beer, smoke weed, and make a baby but determining between the two of them a value less than a Andrew Jackson is a crime.
Readit News
They have a FAQ explaining the rules here: https://www.dir.ca.gov/dlse/Fast-Food-Minimum-Wage-FAQ.htm
You may be thinking of this:
> Restaurants that operate a bakery that "produces" and sells "bread" as a stand-alone menu item as of September 15, 2023, and continue to do so are exempt from the new law.
Not "goofy" at all, perfectly rational -- once one learns that Panera is a contributor to Governer Newsom's political campaigns.
They hire from the same pool of labor as fast food franchises anyways. Actual, proper bakeries are a bit different and more incestuous IME, I think it’s the odd working hours.
Boudin is the only restaurant that would have qualified for the exception. Their owner is not a donor to Newsom.
Companies can potentially escape the law by providing more than "limited service", or splitting the company so they have fewer than 60 locations, or selling food that requires some preparation by the customer.
Probably not, since part of the reason it is so specific is that it preempts local targeted (industry-specific as opposed to general) minimum wage laws. So trying to wiggle out around the boundary of the law would potentially expose a chain to having to deal with different targeted minimum wage laws in multiple CA jurisdictions.
So I guess a frapuccino would go from $4 to $4.12.
This is also happens to be easy way to buy votes, using none of your own money, and has been a tried and true political play for many decades.
This is the definition of “monetary inflation” rather than the more common “consumer price inflation” that everyone who isn’t a particular kind of crank means when they use “inflation” unmodified in general use (rather than internally in a very specific academic/research community.)
> However this has a similar effect venue it applies unneeded artificial pressure to a free market.
“Free markets” do not, and cannot, exist in the real world; they are not merely an idealized concept, but actually one that requires assuming contradictory things.
> This is also happens to be easy way to buy votes, using none of your own money, and has been a tried and true political play for many decades.
The long series of advocacy from multiple sides, early legislation, referenda against that legislation, and labor, industry, and government negotiations to reach a mutually tolerable resolution that resulted in this law can be described as many things, but “an easy way” to do anything is not one of them.
(The initial minimum wage increase is a tiny part of the law, whose main function is setting up a new industry regulatory authority with labor, franchisee/restaurant owner, and franchisor/chain owner representation, with general statewide regulatory authority over industry working conditions in the state.)
True, it should be modeled as an input commodity adverse price shock -- as if the prices of some other essential, say wheat or potatoes had jumped by 30% -- though only for restaurants that fit the criteria.
People's brains have become so poisoned about institutions that government actually helping people seems suspicious instead of its purpose.
It will likely result in a cut in hours for marginal workers, boosted hours for higher productivity workers and more outsourcing/automation.
Labor intensive restaurant operations will have a competitive disadvantage to capital intensive models, and so we’ll see more capital intensive ones thrive.
It should spur more productivity via automation (like more kiosks and robots being used in fast food).
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Dead Comment
Fast food work has long been denigrated as a low-pay dirty job predominantly staffed by teenagers and under-skilled under-privileged workers who lack better job opportunities.
In the California zeitgeist this makes pro-fast food worker action politically irresistible. This is actually a compromise agreement reached after an earlier bill[0] was passed and fast food franchisees threatened to run a ballot proposition to get it repealed.
Basically, politics is how we determine who gets what part of the pie. Fast food workers are sympathetic and politically powerful right now. They simply have more political power than other minimum wage workers and they are now cashing in on that political power.
[0]: https://legiscan.com/CA/text/AB257/id/2605912
The longer answer is…well, research the history of the California FAST Act, which this updates/replaces, and AB 1228/2023 (the law here), and the negotiations by which the industry referendum against the former was withdrawn in exchange for the rewrite of the latter that was then adopted.
An argument for some kind of baseline, nationalized health insurance. Removes that burden from Employers and they can then turn to the far cheaper option of employing them for an extra 10 - 20 hours a week + raises.
Employers can use insurance benefits as hiring incentives, further creating better competition in the market for employees.
The "minimum wage" is, and remains: $0
Effectively, it is illegal for two consenting adults to agree to $19/hour in exchange for work. They can have sex, drink beer, smoke weed, and make a baby but determining between the two of them a value less than a Andrew Jackson is a crime.
Does that seem right to you?