California was warned that its fast-food minimum wage hike would result in job losses and rising prices. That reality has now come to pass, as even California must abide by the most basic laws of economics.
According to the latest Bureau of Labor Statistics report Thursday, California lost 6,166 fast-food jobs since the fast-food minimum wage hike from $16 to $20 an hour went into effect in April. As a whole, the country had an overall fast-food employment growth of 1.6%. According to the Employment Policies Institute, California’s decline in fast-food employment is steeper than the decline in overall statewide private employment.
The reality is California’s fast-food job losses started before the minimum wage law came into effect, with Pizza Hut laying off 1,200 delivery drivers as companies began crunching numbers on the newly increased cost of doing business in the evermore expensive California. In June, Rubio’s Coastal Grill announced it would be closing 48 locations in California due to the “current business climate” in California.
This doesn’t account for the workers who remain employed but had their hours cut, meaning they won’t see as much benefit (if any) from the new increase. The Employment Policies Institute said 89% of California fast-food employees had their hours cut between April (when the increase went into effect) and May.
Then there is the inflationary effect, with McDonald’s and Chipotle immediately announcing they would be among the companies increasing prices in response to the law. According to the California Legislative Analyst’s Office in March, prices in California went up 20% since 2020. As CalMatters observed at the time, “Over the past couple of months, prices in California appear to have risen slightly more than the country as a whole, according to data from the Bureau of Labor Statistics.”
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Everyone could have seen this coming, from the job losses to the cut hours to the increase in the cost of living, because that is what happens when you impose a minimum wage and continuously increase it. Despite that, the Service Employees International Union began demanding another minimum wage increase immediately after the increase to $20 an hour, and California Democrats tried to impose a statewide minimum wage increase from $17 an hour to $18, only for it to be narrowly voted down by California voters in November.
This basic economic illiteracy makes it more and more difficult for people to live in California, as the state traps its workers in an inflationary cycle that gives them little financial benefit between the cut hours, lost jobs, and increased prices for everything in the state. Worst of all, it is predictable. California Democrats are so ideologically broken that they think the basic laws of economics can be bent to their progressive wills, making life worse for Californians every single day.
This article was originally published at www.washingtonexaminer.com
