California is making a new act for fast food restaurants that have 100 or more locations to raise their minimum wage to 22 dollars an hour compared to 15.50 an hour. This new act will go into play on January 1st of the next year(2023).  

Gavin Newsom, the governor of California, has signed this into law on September 5th 2022. This act is called “The Fast Food Accountability and Standards Recovery Act”.

It is said that this could  affect and even harm some small businesses.

Businesses could be forced to lay off employees and stop hiring. With this act, under staffing could become a greater possibility and more common among small businesses. 

Most teenagers usually begin working in the fast food industry. This implies that the chances of a teen getting a job in the fast food business now will decrease drastically. Small businesses would not hire as much like they would. Big companies like McDonalds could take a financial hit, while smaller businesses might not as much. 

As said before, businesses with 100 or more locations will have to raise pay and eliminate profits earned by the restaurant. This will affect smaller businesses more than big corporations.

Another thing that could also happen is the decrease in the food quality and service. As experienced by many, when food places are understaffed, food takes longer to prepare and send out for the customer.

Some people aren’t as patient as others or they simply may not have much time on their hands. In-N-Out burger has 358 locations in the United States,262 within  California. They have a long waiting time to get food. In-N-Out burger hires teenagers and would possibly drop them for not being able to afford it which means another employee that can help out and reduce waiting time. 

“Some businesses may want to leave California as a whole, since prices to own multiple locations will sky rocket”, Mr. Stimac ,a Golden Valley’s High School Economics teacher has agreed with this statement.

Each McDonald’s makes around 3,000,000 a year and the owner keeps 10 percent. Which about300,000 and 2,700,000 goes to payroll and store expenses.

The payroll for McDonald’s will have to come out of the location’s profit as 1,300,00 from 3,000,000 a year depending on the staff. The new payroll would be 1,927,000, a 627,000 difference. Leading to the business losing money and not being able to pay workers. 

This could lead to locations making the prices higher to be able to make ends meet. They will have to raise prices since they can’t lower price costs of ingredients or lower wages. 

Some people know this will happen and others did not at all. Out of all the people interviewed, only 4 out of 8 knew it was going to happen. There should be awareness spread around since it’s something that the public should know about. 

This is an important topic to society. The push for the 22 dollar minimum wage started 5 years ago, and has recently been approved by the state of California. As of right now, this is not good for the economy. “The United states of America is experiencing the fastest rate of inflation since the 1970’s” says Stimac. That is a pretty big gap in time for the economic state of the country. 

This could affect the economy in many different ways. Prices will go up and be more than expensive to buy produce or anything in general. Inflation is a really big deal right now. “Prices could go up and a 5 dollar soda could go up to 8 dollars” commented Chris Galves , a Junior at Golden Valley. 

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This could affect the employment rates. People’s hours or perhaps their entire work schedule could change as a result. Many people that rely on minimum wage will receive less hours, therefore resulting in possibly less money, or the same as what was being made

 “The people that are in poverty and rely on the minimum wage would be pushed more into poverty” continued Stimac, ”… Only certain employees could possibly avoid lay-offs, however many employees will be dropped and left without a job. “

The new minimum wage could have many effects on California. People can be blind by the good of the front page and don’t see the downsides of it. Both good and bad will come from this new act.