Ron Ross, the owner of four Wendy’s stores in the Los Angeles area, is adamant about what will happen at his restaurants now that Gov. Gavin Newsom has signed AB 257 into law.
“I think you will see the average (fast food) meal going up by $2,” Ross said.
“We’ll adjust,” he added. “We’ll cut back on our staff. So, less people will make the same hours, we’ll employ less people and raise prices. It’s either that or go out of business.”
The new state law, signed by Newsom on Labor Day, will create a 10-member panel to impose new rules on quick service restaurants.
The panel could force restaurant operators to set wages, schedules and work rules, among other things. The council’s orders would apply to restaurants in the state that are part of a set of fast-food chains consisting of 100 or more establishments nationally that share a common brand.
The council can raise the minimum wage to as high as $22 an hour starting next year and then increase it by the consumer price index or up to 3.5%.
The Stop AB 257 campaign, founded by the California Restaurant Association and International Franchise Association, said in a statement that by making AB 257 law, Newsom has targeted one slice of California’s small businesses and consumers who rely on counter service restaurants to feed their families.
“As individual employers and neighborhood restaurants across the state, we will use every tool at our disposal to protect our consumers, workers, and other job providers from the pain and havoc that will result from enacting this bill,” the group said in the statement.
Ross, who has been a Wendy’s franchisee for over 30 years and has restaurant locations in Woodland Hills, Monrovia, Pico Rivera and Southgate, said that maybe the panel won’t raise fast-food workers’ pay to $22 an hour and instead gradually increase it.
“I find it amazing that they already had a number ($22) in mind before the bill was passed,” Ross said.
At $22 an hour, an employee would make about $45,760 in gross wages a year. That is a lot for what Ross describes as a first job. The people who get take those jobs are generally unskilled and not raising a family or buying a million-dollar home, he added.
“Well, go back to the days of (Wendy’s founder) Dave Thomas and it was a starting wage and a starting job to learn some responsibility,” Ross said. “Now we are chasing some livable wage, I guess.”
But if there is a silver lining in the bill becoming law, it is that it will be easier to hire employees, Ross said.
“You can’t go to full service and make that kind of money. You can’t go to Macy’s and make that kind of money. You can’t go to Home Depot and make that kind of money,” he added.