Countless Workers Face Layoffs, Reduced Hours as California's Outrageous New Minimum Wage Law Kicks In
Editor’s Note: Our readers responded strongly to this story when it originally ran; we’re reposting it here in case you missed it.
California fast-food workers are about to find out that there’s too much of a good thing.
With a state law that kicked in April 1, raising the minimum wage at most fast-food restaurants to $20 an hour, some businesses have already announced plans for shedding employees and cutting hours.
And, naturally, it’s going to mean higher prices for everyone.
The law raising the minimum wage for the Golden State’s half-million fast-food workers was signed by Democratic Gov. Gavin Newsom in September, according to USA Today.
It was a gift wrapped up in a bow to organized labor — a Democratic fiefdom that ponies up money and shock troops to win elections.
But for the workers supposedly being looked out for by the union bosses, the $20 an-hour law could mean some significant unforeseen consequences that could have been foreseen by anyone with a dime’s worth of common sense.
As The Wall Street Journal reported last week in a piece forecasting the effects of the minimum wage hike, those consequences include increased automation, workers laid off and reduced hours for those who manage to keep their jobs.
“A study by the nonpartisan Congressional Budget Office last December found that raising the federal minimum wage to $17 an hour from $7.25 by July 2029 could increase wages for more than 18 million people, but also could reduce employment by about 700,000 workers,” the Journal reported.
“Higher wages would increase employers’ costs, raise prices for consumers and depress some demand, the CBO found. Some employers would also turn to technology to try to reduce their reliance on low-wage workers.”
It doesn’t take a business genius to see that paying fast-food workers a ludicrous minimum of $20 an hour for jobs that require minimal training and, frankly, minimal ability, is going to force restaurant owners to either raise prices or cut their workforce.
Unlike government entities such as public schools — which, in the liberal mind, exist to provide jobs to their unionized workforces and bloated bureaucracies — businesses exist to make money for their owners.
Making money means charging more for a product than it costs to produce it. When production costs get too high, the business owner is forced to either raise the price of the product or cut its production cost — both of which are likely to hurt the very people Democrats and their union backers claim to be helping.
California’s fast-food sector is already seeing some ill effects of the law, since businesses began preparing for its arrival.
“California had 726,600 people working in fast-food and other limited-service eateries in January, down 1.3% from last September, when the state backed a deal for the increased wages,” the Journal reported. “Total private employment in the state declined 0.2% over that period, according to state figures.”
That kind of impact — obvious as it — gets downplayed in liberal media outlets, though even they can’t ignore it completely.
One NPR piece, for instance, played the story under a neutral-sounding headline:
“California fast-food workers will get $20 minimum wage, starting Monday.”
But then it treated readers to six paragraphs about how the law is a “big win for cooks, cashiers and other fast-food workers — some of the lowest-paid jobs in the U.S.”
(Considering it’s NPR, it’s surprising we don’t know what percentage of those workers might be transgender.)
The article eventually gets around to talking about the consequences: laid-off workers, reduced hours, increased automation and higher prices.
The piece also noted that “California is one of the country’s most expensive states.” The fact that it’s dominated by lunatic leftists in government, of course, is purely coincidence.
And as for hiring new employees? It’s not likely the new minimum wage is going to make restaurants eager to take on new workers when they’re going to be cutting the hours of the ones they have.
Reality is reality, as those in business understand — and liberals in government almost never do.
“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,” the Journal reported.
It quoted Scott Roderick, who owns 18 McDonald’s restaurants in Northern California.
“I can’t charge $20 for Happy Meals. I’m leaving no stones unturned,” he said.
When Roderick does turn those stones, it’s almost certainly going to mean cutting the human costs of producing those Happy Meals. And other restaurant owners in California are going to do the same — or they’re going to stop being restaurant owners.
Lost jobs, reduced hours, greater automation.
That’s what too much of a good thing is bringing to the Golden State. And it’s all for the workers’ benefit.
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