CA Min Wage Hike Costs State 10,000 Jobs

(IntegrityPress.org) – As businesses in California feel the effects of the new $20 per hour minimum wage, the California Business and Industrial Alliance (CAIBA) warns that 10,000 people have lost their jobs to date. CAIBA says that the law, which went into effect on April 1, 2023, has pushed businesses’ costs too high for them to be able to afford to retain their staff.

CAIBA president Tom Manzo says that the Democrat run state has been hostile to businesses for many years, and that this wage hike is yet another law that “puts businesses into further jeopardy”. He explained that the excess cost for wages is often covered by higher prices, and that at some point customers simply refuse to pay those higher prices for goods and services. This has resulted in businesses cutting jobs, shutting down stores, or leaving the state in search of better markets.

Rubio’s Coastal Grill, a Mexican chain, has recently announced its plans to close 48 restaurants across California. The San Diego based restaurant attributed its decision to the “rising cost” of operating within the state. Ben Wheaton, an economist from the UCLA, said that the chain’s decision was likely triggered by the $4 per hour increase to wages. Under the new minimum wage law, fast food workers must receive $20 per hour, although the minimum wage for other sectors remains at $16 per hour. Gov. Gavin Newsom has fought back against critics of the wage hike, with his office claiming that 6,600 jobs had in fact been created in the fast-food sector between April 2023 and April 2024.

Since the sudden wage increase, Californians have found themselves less able to afford to eat at fast-food restaurants. Nearly four-fifths of Californians now view fast-food as a “luxury”. Jonathan Maze, editor-in-chief of Restaurant Business said that price increases have damaged the “reputation” of fast-food as something for ordinary families to enjoy. He observed that food prices at McDonald’s have increased by 40% since 2019 due to increased costs of energy, materials, and now labor.