McDonald’s Owners Alarmed Over CA’s Poisonous $20-Hr Wage Mandate

P. Gardner Goldsmith | September 20, 2023
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Monday, September 18, was “National Cheeseburger Day,” seeing Wendy’s sell a burger for a penny and McDonald’s sell one for 50 Cents. And, in addition to the day bringing more light to how, despite decades of productivity gains, the government-granted bank monopoly has devalued their fiat currency (in 1948, the original McDonald’s hamburger cost a nickel) it also brought more attention to the fact that the California government -- and all others that impose minimum wage mandates -- eat away our expendable capital, our choices, jobs for fast-food and other low-wage employees, and the chances for people to start new businesses.

And the irony that McDonald’s started in San Bernadino, California, adds an extra resonance to the lessons we can learn about how government aggression harms so much of what we strive to create in a free market.

CNBC’s Kate Rogers reports that Thursday, September 14, the California Assembly carried out its threat to impose a $20 per-hour wage mandate on all national restaurant chains with 60 or more employees operating in the state.

Besides the fact that such an imposition clearly violates the US Constitution’s “Contract Clause” – which prohibits state governments from interfering in already agreed-to private contracts – the imposition will add to the already crushing taxes, policy mandates, food content edicts, labeling mandates, and other impositions piled on McDonalds and others by local politicians, the state, and the offensive feds.

Writes Rogers:

The bill, AB 1228, was passed by the state Senate late Thursday and heads to Gov. Gavin Newsom's desk for signature. He has already pledged to sign the bill into law. It includes a wage floor of $20 for California workers at fast-food chains with at least 60 locations nationwide, starting April 1.”

This not only is a bleak high-water mark for already-insulting and oppressive “wage mandates” imposed by people who don’t own the businesses or work for them -- who haven’t invested the time and money to risk opening a restaurant or to try to get an entry-level job and offer limited skills for pay – it is a warning to others, nationwide, and a “teachable moment” to reveal how immoral and unworkable minimum wage edicts actually are.

Related: Guess What? San Diego County's Minimum Wage Hike...Is Hurting Jobs! | MRCTV

Rogers adds:

“The National Owners Association, an independent advocacy group of more than 1,000 McDonald's owners, projects in the memo the bill will cost each restaurant in the state $250,000 annually. The group said the costs ‘simply cannot be absorbed by the business model.’ It also warned similar legislation will follow in other states.”

Given that there currently are 1,219 McDonald’s restaurants in California, that estimate comes to $304,750,000 in added expenses, per year.

That’s a-third of a billion in costs, imposed by the brute, tax-funded force of the Newsom police-state.

And it harms more than those who might want to work in those restaurants.

Advocates of this typical “minimum wage” chicanery flippantly claim that they “know” the business owners can “afford” to shell out more for their employee expenses. They portray as avaricious and greedy the typical, necessary intent of business people to keep costs low and competitive.

But these political harridans not only have no moral place to claim they know better than others how to value the factors of their lives, they don’t offer their own alternative in the market. They don’t start their own business to offer wages that they tell others to pay.

Instead, they use the force of government to command and control, to prevent buyers and sellers from freely associating with each other on their own terms, at whatever price they agree is satisfying.

And that means that the final employer in the equation, i.e. the consumer, is prevented from saving money, to the tune of that third-of-a-billion mentioned above. That is a lot of wasted money that could stay in their pockets and be spent on other things, other opportunities, other new employees and inventions.

Economic truth tells us that many fast-food consumers simply will buy lower-priced alternatives or make their own meals, seeing these politically targeted restaurants atrophy, seeing them end new hiring, stop expanding, and, in fact, hemorrhage employees or shut down altogether.

As economists such as Thomas Sowell and Walter Williams have explained, minimum wage edicts impose costs on all participants in an economic system that is supposed to cater to the interests of consumers who want to save money and work less (not more) for their needs. As a result, consumers reduce their consumption of the artificially higher-priced items or services, and they seek alternatives, reducing the employment capacity for people whose skills originally could have supplied the product or service at the natural, lower price.

This shuts out those low-skilled employees and those wanting to get jobs, while preventing consumers (especially poor consumers) from getting what they want and having money left to save, invest, or buy new products.

And this problem of government interference in hiring is not isolated to the imposition of minimum wage mandates. Government also separates natural consumers from sellers – in other words, it also prevents freedom of association – when politicians impose tariffs on foreign goods, when politicians prevent hiring of foreigners, when they impose so-called “regulations,” or impose licensing mandates that prevent new, low-skilled people from offering services as diverse as hairstyling and interior decorating.

Every one of those arrogant insertions by politicians into private interaction ends up preventing consumers from saving money and, in a highly immoral way, each of those political moves threatens people merely for wanting to associate in peaceful, human-to-human, contact.

It is neither moral nor economically wise to interfere in all of their private choices, choices that, if left alone, show others what is valuable and help drive useable capital towards what people prefer.

It seems as if politicians prefer to push others around, and Gavin Newsom and his allies in California are perfect examples of these political predators, donning the faux shining armor of the “worker’s paladin” when they are engaged in a full-on assault on everyone’s freedom and betterment.


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