On April 1, California increased the state’s fast-food workers ‘ minimum wage to$ 20 per hour. Because the government’s damaging effects on restaurants and employees are as bad as its detractors predicted, no one was laughing during the April Fools joke.
Next time, California’s Democrat- led government passed the bill to climb the minimum salary to$ 20 for the government’s more than 500, 000 rapid- food workers, and the state’s Democrat Gov. Despite strong business complaints, Gavin Newsom eagerly signed it into law. By giving enthusiastic fast-food workers a stronger voice and a seat at the table, Newsom claimed the law “one move closer to fairer income, safer and healthier working problems, and better education.” In order to offset rising prices, opponents of the law warned that fast-food restaurants would have to reduce the number of employees working there, reduce the time remaining, raise prices, or even close locations. The concerns of the reviewers were dismissed by the Democrats and the organizations.
Since April, the reviewers ‘ instructions have turned into a terrible reality. Fast- food stores in California, in an effort to adapt to the new regulations, started reducing their labor next year. The Southern California Pizza Company, for example, laid off around 841 distribution vehicles nationwide in December 2023. Fast-food chains have lost nearly 10,000 jobs since Newsom signed the minimum wage increase bill into law last September, according to the California Business and Industrial Alliance ( CABIA ). These are actual people losing their lives, not only numbers. However, the task breaks are not over yet. Around 1, 280 distribution vehicles will be laid off this year, according to Pizza Hut and Round Table Pizza owners.
Harshraj Ghai, the owner of 180 rapid- food eateries in California, including Burger King, Taco Bell, and Popeyes, explained his battle to keep up with the changes brought by the new rules. There is a cap on how much sticker shock users will bear, but he had already raised food costs by more than 10 %. At Burger King, few people are willing to pay$ 20 for a burger. About 25 % of the Ghai-owned restaurants have online ordering restaurants. In the next ten years, he planned to introduce restaurants in the remaining 75 % of the restaurants he owned before the minimum wage increase. But since April, he has expedited the operation, hoping to finish the kiosk implementation in the next 30 to 90 times. More shops mean fewer people are required.
The effects of the minimum wage hike are hardly limited to Ghai’s franchises. Employment prospects in the fast-food sector are shrinking as eateries choose to shut down existing ones in California instead of avoiding opening new ones. Hom of Vitality Bowls, for example, has chosen to expand in various state rather than start new ones in California. Rubio’s Coastal Grill, a favorite Mexican quick- food chain, cited” the rising cost of doing business in California” as the reason for its decision to close 48 locations in the state at the end of May.
A poignant reminder of the dire effects of the$ 20 minimum wage mandate on workers and the struggling restaurant industry, CABIA recently published a mock obituary titled” Victims of Newsom’s Minimum Wage” in USA Today.
Increased Price Leads to Lowering Demand
If Democrats had understood this fundamental economic principle, which states that when the price of something rises, the demand for it falls, they could have avoided these devastating effects. Numerous studies have demonstrated that the government’s minimum wage requirement has always led to job losses for the same types of workers that the law is intended to assist.  ,
A recent study by the Congressional Budget Office, for instance, estimates that raising the federal minimum wage to$ 17 an hour from$ 7.25 by 2029 could lead to a reduction in employment by about 700, 000 workers. Democrats and their union allies claim that raising the minimum wage is a measure to combat poverty, but it is of little use for those who are unemployed.
Not Family Breadwinners
Democrats continue to portray the majority of minimum wage workers as the people who must provide for a family with their income, which is also dishonest. According to research, about 50 % of minimum wage workers are under the age of 25 and “typically live with their parents, and many have middle-class lifestyles.” While their earnings may be small, their average family income is over$ 53, 000 per year”. Another study found that nearly 14 % of minimum wage workers have household incomes over$ 100,000. These young people do not require entry-level positions to earn a living, but rather to gain valuable work experience and abilities.
Will Freeland, a research analyst at the American Legislative Exchange Council ( ALEC ), call these entry-level positions” career building blocks” and” a direct pathway to better pay, not a ticket to permanent status in the lower class as some suggest.” However, the higher minimum wage mandates of the government remove the career building components that the young and inexperienced need the most. Consequently, they “do n’t get into the workforce and gain necessary skills to move up because of some central planners and advocates thinking they are smarter and morally superior”, said Carol Roth, an advocate for small businesses, on X.com.
Furthermore, Chris Calton, a research fellow in housing and homelessness at the Independent Institute, pointed out that the minimum wage laws have a racist history. In the 19th century, labor unions first advocated for the minimum wage requirement to stop railroads from employing black workers. In the 1930s, a number of federal minimum wage laws “forced black people to shift from suffering race-motivated wages to suffering race-motivated unemployment” ( poking ). The minimum wage laws continue to “have a disproportionately deleterious effect on African-Americans into the present day,” according to Calton. Yet, despite Democrats ‘ racial justice rhetoric, they continue to promote the minimum wage laws.
Newsom Shields Special Interests
California Democrats are obviously aware of the negative effects of minimum wage laws. In March, Newsom signed a new law to exempt fast- food restaurants on government- owned properties, such as “airports, hotels, event centers, theme parks, museums, and certain other locations” from the state’s new$ 20- an- hour minimum wage law. A$ 25 an hour minimum wage law for health care workers was delayed by Newsom and the Democratic-led state legislature in May because it would have cost the state government an additional$ 4 billion annually and worsened the already troubling state budget deficit.
Democrats are adept at passing flawed laws before going as far as to defend themselves and their allies from the negative effects of their respective laws. What they wo n’t do is accept policy flaws and reverse course. Californian voters who want a stable economy and a secure environment to raise their families must stop retributing Democrats for their legislative mistakes by keeping them in power.
