More California Restaurants Slashing Jobs, Halt Hiring Ahead of Minimum Wage Hike
“It pains me to think about shutting down stores or laying people off.”
Even more California restaurants have laid off people before the $20 minimum wage hike in April.
California hasn’t learned anything when it raised the minimum wage in 2019.
- Large Minimum Wage Hike Strikes Again, Killing Restaurant Jobs in California and Washington State
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- California’s $15 Minimum Wage Hike Costs UC Berkeley Jobs
Pizza Hut already slashed 1,800 delivery drivers in December. Brian Hom, owner of Vitality Bowls restaurants in San Jose, has two employees for his two stores.
Hom raised prices by 10%. He said having only two employees means “it takes longer to make customers’ açaí bowls and other orders.”
Hom also won’t hire more people or open more stores in California; he might expand outside the state.
Some chains have said they will raise prices, while some operators will do everything they can to avoid that:
The coming minimum-wage increase for California fast-food workers at bigger chains represents a 25% increase from the state’s broader $16 minimum wage. McDonald’s, Chipotle Mexican Grill, Jack in the Box, and other restaurant chains have said they would raise menu prices in California to offset some of the cost.
Many California restaurant operators are looking for other ways to cover the cost, like reducing hours, closing during slower parts of the day or serving menu items that take less time to make.
“I can’t charge $20 for Happy Meals. I’m leaving no stones unturned,” said Scott Rodrick, owner of 18 McDonald’s restaurants in Northern California.
It’s simple economics. A business must make a profit to stay open and provide goods to consumers.
This is not hard. Rising costs in any part of a business affects the other parts:
Alexander Johnson, a second-generation owner of 10 California Auntie Anne’s and Cinnabon restaurants, said the higher wages would lift his labor costs by around $470,000 annually. He has reduced his staff by about 10, and his 73-year-old parents have returned to working in the business to help shave costs.
Johnson said he turned down a recent offer to add a location in a waterfront tourist area in San Francisco because of the projected operating costs.
“It pains me to think about shutting down stores or laying people off,” said Johnson, who moved to Nevada this year to open Scooter’s Coffee locations in the state. “I love California, and I’m very sad about what’s going on.”
But yet politicians and labor organizations continue to lie, calling these moves job creators.
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All they have to do is bake some rolls on site and join Panera Bread with lower rate.
The panera provision included a special requirement that the restaurant had to be baking the bread on or before the passage date of the law.
Panera bread is the only company eligible for that loop hole.
Just a coincidence that Panera’s owner is a good friend of the Governor, lol
The friend part means nothing. The campaign contributions DO,
I haven’t eaten at a fast food restaurant for over 20 years. The food is lousy. Disgusting. It is saturated in saturated fats, salt, sugar, and calories. Most of the patrons are obese, if you open your eyes. The number one cause of death in America, and the number one cause of excessive health insurance costs in America, is obesity. It causes heart disease, cancer, diabetes, and a host of other fatal diseases. But we just accept this as normal, and even celebrate it in advertising. And we as taxpayers and insurance buyers pay the extra billions of dollars because of it. If paying fast food workers $15 or $20 an hour causes people to stop buying junk food that kills them and raises my health insurance, and causes them to start buying healthy food at the grocery store and cooking their own food at home, then I am all for it.
They will quickly find out that ZERO $ is the true minimum wage.
For some there is a “living wage” and the others welfare.
Use the CPI Inflation Calculator tool at data.bls.gov. What you could buy for $16.00 in January 2019 cost you $19.60 in January 2024. This minimum wage increase approximately matches the inflation rate.
Yet the true minimum wage is $0 per hour because that’s what you make when you don’t have a job. The sort of thing that happens when the government regulates business out of business.
I understand that from an economic point of view but I argue it is a negative number. If you are unemployed you are getting paid by some government entity to not work through unemployment or other taxpayer subsidies.
Diver – partially true – but very important point.
The effective tax rate for low income individuals can often exceed 100% when you combine the 15% tax rate, the 7.65% fica rate and the phase out of the earned income tax credit , phase out of the child tax credit, phase out of food stamps, and other benefits.
The single most effective anti poverty program since the initiation of social security was the “ending welfare as we know it” enacted during the clinton administration (at the behest of the republican party)
Not a valid dataset. The CPI hasn’t used a constant market basket for decades, so one thing it definitely doesn’t measure is the increased cost of goods over time.
As these wages continues to rise, I have also noticed a reverse trend in quality of service and work ethic. These people are worse than ever at their jobs.
I don’t do fast food often but I’ve come to like the kiosks. They never get my order wrong.
Totally predictable when the amount of their wages depends entirely on their existence and not on their performance.
I live in Commiefornia (mainly for work and because my parents retired here, as soon as I retire it will be to an actually sane state).
There is both a Taco Bell and a McDonalds less than a mile from my work that have BOTH eliminated counter orders and replaced them with touchscreen orders in the last year.
The true minimum wage is 0. Nobody is going to pay $20+ an hour for a totally unskilled moron that is unemployable anywhere else.
What if the 4th largest economy in the world committed economic suicide.
Democrats would tell everybody that suicide is painless.
I recently discovered that this song ‘Suicide is Painless’ was written by Mike Altman the 14 year old son of Robert Altman who was the director of the movie MASH.
The MSM will say this is all a good thing for some reason or another
It brings on many changes. Permanent changes.
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Not suicide. First degree murder by the left..
Automate everything. Only human job is restocking by truck delivery daily.
Customers order by phone, and drive through pick up.
Added benefit: cuts shoplifting.
Did the democrats in CA really believe that an hourly fast food worker would be making $40,000 a year? Some are truly that stupid, most just don’t care how much real harm they do just to consolidate their power.
Whether or not the pros did, they gambled that their stupid voters would — and it was really a sucker bet to bet otherwise.
When was the last time that the vile and stupid Dhimmi-crat apparatchiks actually did something positive for American businesses? Everything that these reprobates do predictably increases businesses’ taxes, regulatory burdens, costs and risks.
It isn’t taking them very long to proveIt isn’t taking them very long to prove Thomas Sowell correct, the true minimum wage is $0 per hour.
The level of “fantasy-world thinking” is just….off the charts.
How can anyone be that stupid?
The real question is how can anyone be that evil?
Consider the voter. He may not have an education, may not have a job, may not have two nickels to rub together, may not even have a place to call home at night… but he does have a vote, just like everybody has a vote, and that’s all he needs to make things even worse.
Look into the history of the minimum wage. The inventors weren’t stupid about economics, although they were very stupid about human behavior. They _intended_ to put people out of work. They wanted “inferior” people to stop breeding, so they passed a law to set the minimum wage above what those people’s work was worth and sat back to wait for them to lose their jobs and then to react like they were middle class and have no kids they couldn’t support.
“Inferior” people is what the “Progressives” who invented the minimum wage called morons and blacks, yet they thought they were doing good rather than evil! (WTPuck, there’s your answer: evil people don’t believe they are evil.) But those the Progressives targeted weren’t middle class and often had kids in spite of being unemployed, and often somehow kept them from starving to death – even though welfare was inadequate by design. It was as if there was some sort of black market or criminal underworld where the officially unemployable either found unofficial employment, or made a little money in some other way.
Decades later, there was still a minimum wage, and it still shut some out of the job market, but LBJ and other Democrats gave out welfare freely to women who kicked their men out of their lives and could _never_ support their children themselves. This created a permanent underclass of fatherless children who grew up into useless men and irresponsible women, all dependent on welfare. LBJ and the other Democrats used tax money and bought themselves a permanent class of Democrat voters!
Need I point out that stupidity is a resume enhancer for Democrats, particularly the California variety.
The restaurant business is capital intensive, labor intensive, regulation intensive, and in passing it is far from uncommon for those enforcing those regulations to require being paid off. In California,that business is a lost cause. It is time to try to move to America. If you are in a corporate restaurant environment, it is time to get out.
Subotai Bahadur
If you move to the South, leave the politics there. Fouling your own nest is one thing. Fouling ours is quite another.
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I think the long term analysis of movement within the US shows that it’s red state minded voters who are moving out of blue cesspools. So over time red states are getting redder leaving blue states bluer. (This analysis doesn’t include possible effects of Democrat voter import from open borders.) This doesn’t bode well for the “why can’t we all just get along” crowd.
“It pains me to think about shutting down stores or laying people off,” said Johnson, who moved to Nevada this year to open Scooter’s Coffee locations in the state. “I love California, and I’m very sad about what’s going on.”
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Might as well shut down, the commies will never be satisfied until you’re under their boot heels.
Starve the beast of tax money.
California want’s to make sure all those illegals get good high paying jobs right out of the gate so they can pay taxes to help the State out with free healthcare, unemployment, housing, college education etc which is bankrupting them.
Is this the government version of the old supermarket joke? “We lose $1000 per citizen, but we make it up in volume”?
These jobs used to be entry level filled by teenagers working after school. Dept of Labor created rules over the years that limited or eliminated jobs for teenagers. Hence they have no skills/work ethic as they join the workforce. And the other side of said rules is that those jobs were filled by illegals, people paying rent, utilities, food and seniors with to little social security. And don’t forget that union contracts are tied to the minimum wage. When it goes up the base pay for union workers goes up. The unions control commiefornia and therefore just got them selves a raise. FJB
Those rules and many Parents deciding that their children shouldn’t have a part-time job in the school year or a summer job. I had summer jobs and did yard work for neighbors to earn pocket money from age 14. Most of the folks I went to HS with did the same sort of gigs/hustle. Maybe it’s more of a cultural issue that the AWFLs are imposing on the rest of us.
I did the same thing. Started in a car wash at the age 0f 14. Moved to Florida and started working as a laborer at a construction site during the summer. Worked for a lawn maintenance company and a painting contractor. Always had 2-3 jobs going all the way through HS. Bought my own clothes, car. Never asked my parents for a dime.
In the 80’s and 90’s we subsidized moving our factories to China, devastating many small towns. It was suppose to make China less hostile but ended up funding a massive military build-up. We STILL subsidize “free shipping” from China that makes it hard for US companies to compete with.
Does one prefer an economic system where people are paid in relation to their labor in creating wealth where the exchange is between a free people who choose whether or not to engage in a particular wealth transfer, thus setting the price within the bounds of competition for scarcities and the formation and risks of investment capital?
Or one that takes from the landowners by force and shares it among the proletariat?
It’s capitalism vs Marxism.
Any perceived similarity between bidenomics and real economics is purely coincidental.
Businesses closing left and right in places like Oakland and San Francisco should be a clue, but Californians seem to be immune to facts
It’s the Sgt. Schultz effect. “I see nothing. Nothing!”
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“I can’t charge $20 for Happy Meals”
No worries. Once you finally go under, the government will offer their own version. It will cost five dollars, will be called a You Will Be Happy Meal, and the box will contain nothing.
As memory serves, the laws of physics, which have not been amended or repealed stated as follows. “ For every action, there is a direct and opposite reaction.” Think the workings of this basic law are what one sees in California nowadays?
Forcing employers to increase pay, absent any corresponding increase in productivity, is the epitome of economic ignorance. It goes straight to bottom line. The employee gets a 20% raise only to have the inflationary impact wipe out all of his gains. A fool’s errand.
I really wish California would raise the minimum wage to $50, just to drive home the point home for good. It would be hilarious to watch these idiots go from thinking they’d hit pay-dirt, to realizing they had been driven into poverty. And it would happen fast. One minute, $20 an hour and $10 big macs. Next minute, no job and $100 big macs