California restaurateurs are beginning to take their own action in protest of the newly passed statewide $20 minimum wage.
“To make money, we must meet a fairly limited set of economic requirements.” And certainly, this bill has cast doubt [as to] whether we can continue in this state,” Alex Johnson, owner of five Cinnabon and five Auntie Anne’s restaurants in San Francisco, said on “Varney & Co.” on Tuesday.
“I’ve already started to invest in the neighboring state of Nevada,” he said, “where there just isn’t so much regulation, there aren’t so many different types of people telling you how to run your business.”
Johnson has reportedly promised to solely invest in future franchise opportunities in Nevada, alleging that the Golden State’s recent $20 minimum wage law will cost him $470,000 over ten shops.
The regulation, which went into effect on Monday, applies to restaurants with at least 60 outlets nationwide, with the exception of those that bake and sell their own bread.
In September, Governor Gavin Newsom signed legislation known as AB 1228 into law. In addition to the salary raises, it established a “Fast Food Council,” which includes members from both workers and employers and has the authority to approve future pay increases and define working conditions.
However, restaurant operators have warned that increasing pay will result in job cuts and higher consumer pricing. Following the law’s passing, several California food establishments announced layoffs, including Pizza Hut, Southern California Pizza, Round Table Pizza, and Vitality Bowls.
Johnson, a franchise operator, said that “everything’s on the table right now.”
“I believe we are instantly boosting prices, which I strongly oppose. We’ve had to raise prices numerous times in the last couple of years due to COVID-induced inflation. And we are seeing a reduction in sales and traffic,” Johnson added.
“It’s really not a good time to have to do this,” the business owner continued. “We are not backfilling positions; therefore, as people advance in their careers, we will not fill those positions with our personnel. And, ultimately, I am not growing in the state. I’m not opening any new locations.
During a bill-promotion event in Los Angeles, Gov. Newsom referred to the measure as a “big deal,” dismissing the widespread belief that fast-food jobs are just for youths just entering the labor market.
“That’s a romanticized version of a world that doesn’t exist,” remarked Newsom. “We have the opportunity to reward that contribution, reward that sacrifice, and stabilize an industry.”
