We Were Right: Newsom’s $20 Min. Wage Has Now Nuked 20,000 Fast Food Jobs, Cost Remaining Workers Thousands in Lost Hours
the summary of the article is as follows:
California Governor Gavin newsom signed the FAST Recovery Act intending to improve fast-food workers’ wages by raising the minimum wage to $20 per hour. However, two years later, this policy has led to notable job losses rather than benefits for workers. According to the Employment Policies Institute, California has lost nearly 20,000 fast-food jobs since the law took effect, representing a quarter of all fast-food job losses nationwide.Major chains like Pizza Hut have laid off employees,and some businesses have even closed.
The wage increase has inadvertently reduced work hours and total income for many employees. Small businesses, unable to absorb the higher labour costs like large multinational corporations, have suffered the most, leading to further market consolidation. Critics argue that applying a uniform minimum wage across diverse regions of California with varying living costs creates economic distortions.The law has been criticized as a political move benefiting Newsom’s image rather than genuinely helping workers, resulting in harmed families and fewer job opportunities.
Democratic California Gov. Gavin Newsom promised just short of utopia when he signed California’s FAST Recovery Act.
Two years later, the only thing raising the state’s minimum wage for fast-food workers has accomplished is to kill jobs.
The Washington Examiner reported, the Employment Policies Institute found California has lost nearly 20,000 fast-food jobs since Newsom’s law took effect.
That’s one-quarter of all fast-food job losses nationwide.
This is what happens when politicians prioritize virtue signaling over economic reality.
Pizza Hut franchises laid off 1,200 delivery drivers to cut costs. Other chains like Mod Pizza and Foster’s Freeze closed their doors.
Newsom’s mandate didn’t protect workers; it priced people out of jobs.
“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,” EPI’s Rebekah Paxton told the Washington Examiner.
The governor celebrated the law for its supposed benefits at the time.
Now, every lost job represents a family harmed by his state’s economic illiteracy.
And even the “lucky” employees who kept their jobs are losing.
EPI said restaurant workers lost 250 hours annually, or $4,000 under the old wage.
That’s the cruel irony. Newsom promised “living wages,” but workers ended up with fewer hours and less income.
The American Cornerstone Institute warned that the law punishes small businesses the hardest.
They can’t absorb higher labor costs like multinational corporations. Instead, they fold, handing even more market to the biggest players.
The ACI said: “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.”
This wasn’t about helping workers.
This law was about central planning, photo ops, and Newsom’s ambition.
Conservatives warned that this would happen, and we were right.
Sadly, an “I told you so” won’t bring back jobs to the people who paid for another failed California experiment.
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