‘Big losses’: Study confirms Newsom’s $20-an-hour minimum wage decimated industry
Governor’s scheme was ‘nothing more than a boost to his own ego at the expense of fast food workers’
Gavin Newsom, California’s far-left Democrat governor, is known to have presidential aspirations.
If he chooses that path, one of issues on which he will face a grilling will be economics.
And a new study has revealed it won’t look good.
It’s because since he imposed a $20-an-hour minimum wage for fast food workers in his state, California has lost close to 20,000 such jobs.
“That’s nearly 25% of the country’s fast-food job losses during that same period, according to an analysis of quarterly data released this month from the Bureau of Labor Statistics,” charged a report in the Washington Examiner.
“These grim statistics should be a wake-up call for Newsom and other policymakers pushing for drastic wage hikes that will cause unintended consequences,” said Rebekah Paxton, if the Employment Policies Institute.
The Examiner report noted Newsom “was all smiles two years ago when he signed the FAST Recovery Act, creating a $20 minimum wage for fast-food workers in his state. He called the legislation a win-win-win that would benefit restaurant owners, their employees, and customers alike.”
But it’s actually left behind “big losses.”
Besides job losses, there have been staff cuts, huge menu price increases and a turn to automation, the report said.
“California made national headlines when two large Pizza Hut franchises laid off more than 1,200 in-house delivery drivers to cut costs, while others, such as Mod Pizza and Foster’s Freeze, decided to close up shop entirely,” the report noted.
Paxton said, “Newsom’s $20 wage has turned out to be nothing more than a boost to his own ego at the expense of fast food workers. His consistent claim that the law is a ‘win’ is out of touch with reality, and lawmakers looking to mirror his job-crushing policies should think twice.”
Further, the analysis found even workers who kept working lost.
“The law has cost nontipped restaurant workers 250 hours of work annually, according to the EPI analysis, which represents $4,000 in lost income under the state’s previous minimum wage for fast-food workers.”
And, according to the American Cornerstone Institute, it’s hit small businesses hardest.
“Unlike their multinational competitors, small businesses have a tougher time absorbing the increased costs of labor, leading to further consolidation of capital in the hands of the largest corporations. In the same manner, a state-wide minimum wage doesn’t make sense when applied uniformly across a state as big as California. The costs of living in somewhere like San Francisco, for example, are much higher than in the rural parts of the state, where one can live much more affordably. To force the businesses in both areas to adhere to the same wage rates does not make sense and exerts profound distortions on local economies.
Then there’s the damage to consumers, who are paying prices 13% higher because of Newsom.
University officials in the state have challenged the findings, saying fast-food employment hasn’t fallen, work hours weren’t changed and prices went up only 2.1%.
