California’s Franchise Owners Anticipate a Significant Impact as Minimum Wage Increases

California’s Franchise Owners Anticipate a Significant Impact as Minimum Wage Increases

(NewsNation) — California is raising its minimum wage for fast-food workers to $20 an hour starting Monday when a new law will kick in, giving more financial security to a historically low-paying profession while threatening to raise prices in a state already known for its high cost of living.

Scott Rodrick, the owner of over a dozen McDonald’s locations in California, joined NewsNation’s “Morning in America” to discuss how the change will impact franchise owners in the state.

“Restaurants are going to look at every possible way to survive post-April 1 relative to this huge impact to their profit and loss statement. And so obviously, one of the levers that a small business has to pull, in terms of that path to survivability, is to take price. But frankly, especially in my case, I can’t charge $25 for a Happy Meal,” Rodrick said.

The law was supported by the trade association representing fast-food franchise owners. But since it passed, many franchise owners have raised concerns over the impact the law will have on them, especially during California’s slowing economy.

“I think the repercussions are going to be dramatic. The impact of this legislation is not entirely known. I mean, if you think about the unprecedented, extraordinary nature of what’s happening literally overnight, this has never happened in the country, not in California, not in all 50 states,” Rodrick told NewsNation.

Democrats in the state Legislature passed the law last year in part as an acknowledgment that many of the more than 500,000 people who work in fast-food restaurants are not teenagers earning some spending money, but adults working to support their families.

“A fair wage for one should be a fair wage for all, whether you work in McDonald’s, whether you work in the bookstore next door, whether you work at the gas station down the street,” Rodrick said. “I think relative to defining a living wage, a starting entry point in our economy, that should be left to the states that should be left to municipalities.”

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