Apparently unhappy with the current pace of business migration out of their state, California’s legislators have come up with a good way to accelerate it. They voted recently to create a council of political appointees to set wages in the fast-food industry. The so-called FAST Recovery Act awaits Governor Gavin Newsom’s signature. He can’t squash this ill-conceived initiative quickly enough.
California’s Plan to Get Fast Food Workers Fired
- The Editors | Bloomberg
- September 5, 2022
A statewide minimum wage for a subset of workers would arbitrarily fragment California’s labor market, raise prices for consumers, and depress investment across the industry. The incentive to hire would fall and the return to automation would rise.
California already has a minimum wage of $15 an hour. The new measure envisages raising this to as much as $22, with inflation-linked increases to follow — but only for those who work for big fast-food chains. Why this group should be singled out for special protection isn’t entirely clear. Yes, the bill’s proponents believe that market-determined wages are inherently predatory, and that the franchise business model compounds this underlying problem. Even so, the fast-food industry seems a strangely narrow target. . . .
A statewide minimum wage for a subset of workers would arbitrarily fragment California’s labor market, raise prices for consumers, and depress investment across the industry. The incentive to hire would fall and the return to automation would rise. As these effects became apparent, the bill’s supporters would doubtless see the need for further rounds of regulatory repair. Once you start to dismantle markets, it’s hard to stop.
