Next News Network

Think being a business owner is tough now? Wait until you hear about Governor Newsom’s new plan that will cripple entrepreneurship in the liberal state. It’s going to wreck havoc and push the few businesses left in the state to collapse.

California has found a new way to destroy businesses.

According to The Daily Wire, Legislation passed by California lawmakers on Tuesday establishes a council with the power to raise minimum wages at fast food restaurants.

An overview of AB 257 says it creates a “Fast Food Council” responsible for developing “industry-wide minimum wages, hours, and other working conditions” Governor Newsom is expected to sign it into law.

This legislation — backed by the powerful Service Employees International Union — applies only to restaurants that have 100 or more establishments across the country, except for restaurants that operate bakeries that sell bread as a separate menu item. Activists have been pushing for this legislation but missed the deadline earlier this year. Elex Michaelson has more.

The $15.50 minimum wage scheduled to become effective next year can be raised to $22 per hour by council members – representing a 40% increase.

The bill comes one year after aggressive government lockdowns forced many California restaurants to close their doors. McDonald’s USA President Joe Erlinger denounced the legislation for imposing “higher costs on one type of restaurant while sparing another.”

Erlinger explained, “If you are a small business owner running two restaurants that are part of a national chain, like McDonald’s, you can be targeted by the bill,” “But if you own 20 restaurants that are not part of a large chain, the bill does not apply to you.”

According to Erlinger, “backroom politicking” might explain the carveout for restaurants with a bakery. “This is a clear example of picking ‘winners’ and ‘losers,’ which is not the appropriate role of government,” he commented.

Based on the analysis of the California Department of Finance, the legislation could “raise long-term costs for employers” due to a fragmented regulatory and legal environment across industries.” There are more than 40,000 McDonald’s restaurants as of 2021, according to the company’s most recent federal filings, with 93% of locations constituting franchises.

Several restrictive labor laws have been implemented in California in recent years. According to Newsom, workers are exploited because they are classified as independent contractors rather than employees. Although a California court granted Uber and Lyft an emergency stay in 2020 over a lawsuit that would have pressed the companies to conform to the law, the Supreme Court recently declined to hear the case, resulting in the end of the stay and provoking independent truckers to shut down major ports in protest.

A statement from Newsom’s office said AB 5 was passed with “enough time for affected parties to understand its requirements” and urged the trucking industry to “move forward” in supporting it.

As a result of the new minimum wage legislation, the California Air Resources Board has announced new rules requiring 35% of new vehicles to produce zero emissions by 2026 – a standard that will rise to 68% by 2030 and 100% by 2035. Researchers have warned that the state’s electric grid will require significant upgrades to manage a rapid transition away from internal combustion vehicles — a fact reflected this week when the California Independent System Operator advised residents not to overload the grid by charging their electric vehicles.

Simple economics tell us, when wages go up, so do prices. In a state already plagued with sky high prices and costs of living this plan by the California legislature is sure to raise them even higher. It’s a typical play the Democrats to win easy points with voters, but the results are not going to be good.