McDonald’s president says California’s FAST law will kill restaurants

The California FAST Act, which would raise the minimum wage for fast-food workers to $22 an hour, is on the backburner for now.

McDonald’s president Joe Erlinger said the FAST Act, a law known as AB257, “makes it impossible to operate small, local restaurants.”

California’s AB257 actually passed in the fall of 2022, but more than a million opponents have signed a petition demanding that the issue be put to a vote. California voters will voice their opinions in November 2024.

Opposition was represented by a group called Save Local Restaurants.

Similar Laws Introduced in Virginia

Virginia’s House Bill 2478 was introduced on January 20, 2023. The parts are the same as his AB257 in California. The bill would create the government’s Fast Food Industry Workers Standards Board to oversee wages and working conditions.

Virginia HB2478 currently serves on the House Rules Committee.

What is AB257?

Proponents of the bill refer to AB257 as the Labor Rights Bill. What are the critical parts?

1. Create a 10-person national council to negotiate wages, hours, and working conditions for California’s 500,000 fast food workers.
2. Hourly wages are up to $22, with capped annual raises.
3. AB257 applies to restaurants with more than 100 stores nationwide.

Do Higher Wages Mean Higher Prices?

According to McDonald’s president Joe Erlinger, the cost of quick-service meals at restaurants will rise by more than 20% as workers’ hourly wages rise.

Erlinger feels that higher prices will cause consumers to visit fewer establishments, which could lead to fewer employees.

Erlinger also questioned what he called a “last hour exemption” added to existing legislation.

Restaurants with fewer than 100 locations nationwide are not eligible.

It does not apply to restaurants that bake bread on the spot.

Erlinger said he supports a “responsible increase in the minimum wage”. But he added that such increases should apply to all industries and workers.

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