A new law was signed in California on Labor Day- the Fast Food Accountability and Standards Recovery Act (FAST)– that raises the minimum wage for fast food workers to $22 per hour starting next year, rising with inflation every year thereafter, along with providing other worker protections. Technically, the law creates a ten-member state council empowered to set fast food wages to no greater than $22 per hour for calendar year 2023 and also set working conditions.
The FAST Act applies to chains with limited or no table service and with more than 100 locations worldwide. As a note, the current California minimum wage increased to $15 per hour in 2022, the highest in the country, and is set to rise by 50 cents in the New Year. The federal minimum wage is $7.25 and hasn’t been raised since 2009.
Passing the FAST Act is a real-world test of bureaucratically controlled central planning.
This legislation introduces a labor model used in Europe where unions negotiate for wages and work conditions in an entire sector, instead of negotiating with an individual company. California has the largest economy of any state, as such enacted policies tend to influence policies in other states.
How will the FAST ACT affect the balance between wages set by the government and by the market? Enjoy this article, it gives perspective into the events which led to the passage of the law. Let me know what your thoughts are on this new legislation!
~ Brian Kasal- The Leadership Matrix
P.S.- Did you see my last Leadership Matrix post? The Rising Cost of Groceries: Inflation is All the Rage- Vol. VIII