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Those working in restaurants in several states could see their wages finally increase in 2023, but the news comes as employers are also eyeing business moves for their future which may reduce the number of jobs actually available.
According to CNBC, following California’s raising its state minimum wage to $15.50 an hour on Jan. 1, an ongoing court battle over the FAST Act could actually see wages for fast-food workers increase to as much as $22 an hour by the end of the year, with other states potentially following in their footsteps. The law, which was signed by Gov. Gavin Newsom, creates a 10-person council to govern wages and working conditions for workers in restaurant chains with more than 100 locations around the United States. The law has been widely opposed by the restaurant industry which sued against its implementation.
A judge granted an injunction until Jan. 13 on the matter.
Opponents within the industry feel the law goes around already existing laws on labor and franchising regulations and fear it could hurt jobs in the fast-food industry. Chains like McDonald’s and Chick-fil-A, which operate over 13,000 and 2,600 restaurants respectively around the U.S., have poured money into opposing the law.
However, if there is a victory for those in favor of the law, it could be short-lived, as McDonald’s in particular has already announced plans to lay off workers and reorganize the company as it focuses on expansion in the New Year.
In a memo to employees on Friday released to CNBC, CEO Chris Kempczinski shared that job cuts were not about cutting costs, but a necessary measure for the company to “innovate faster and work more efficiently” and that they were halting certain initiatives to also focus on expansion and other projects.
“Today, we’re divided into silos with a center, segments, and markets. This approach is outdated and self-limiting—we are trying to solve the same problems multiple times, aren’t always sharing ideas and can be slow to innovate,” he wrote. “We must accelerate the pace of our restaurant openings to fully capture the increased demand we’ve driven over the past few years.”
Kempczinski did not say how many jobs would be eliminated and said that final decisions would be communicated by April 3.
ABC News, however, reports that the layoffs won’t be coming at the restaurant level and will instead be at the corporate level.
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