{"id":2158815,"date":"2024-01-25T08:10:02","date_gmt":"2024-01-25T13:10:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/californias-disastrous-minimum-wage-hike-offers-a-cautionary-tale-to-congress\/"},"modified":"2024-01-25T08:16:54","modified_gmt":"2024-01-25T13:16:54","slug":"californias-disastrous-minimum-wage-hike-offers-a-cautionary-tale-to-congress","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/californias-disastrous-minimum-wage-hike-offers-a-cautionary-tale-to-congress\/","title":{"rendered":"California&#8217;s minimum wage increase serves as a warning to Congress"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">20<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fcalifornias-disastrous-minimum-wage-hike-offers-a-cautionary-tale-to-congress%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2158815&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div class=\"article-content\">\n<h2 class=\"wp-block-heading\">Residents in California Learn the \u2064Economic Consequences of Taxation<\/h2>\n<blockquote>\n<p>Residents in the Golden State are learning a basic\u200d yet painful lesson in economics: If you tax something, you get\u200c less of it.<\/p>\n<\/blockquote>\n<p>That\u2019s the upshot of reports\u2064 from <a href=\"https:\/\/www.wsj.com\/articles\/california-pizza-hut-layoffs-fast-food-business-democrats-gavin-newsom-dda65234?mod=opinion_feat1_editorials_pos3\" target=\"_blank\" rel=\"noreferrer noopener\">over the holidays<\/a> that California restaurants have begun furloughing workers \u200cin response to an impending \u200dstatewide\u200b mandate taking effect in April. At that point, \u200d<a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/this-california-bill-would-outlaw-fast-food-and-intensify-inflation\/\" title=\"This California Bill Would Outlaw Fast Food And Intensify Inflation\">fast-food establishments<\/a> will have \u200cto pay a $20 minimum wage \u2014 up nearly 30\u2062 percent from the state\u2019s current $15.50 per hour.<\/p>\n<div class=\"fdrlst__b89e9-paragraph-2-long d-flex justify-content-center\" style=\"margin-left: auto; margin-right: auto; text-align: center; \" id=\"fdrlst__b89e9-237363042\">\n<div id=\"div-gpt-ad-1379703300879-0\" class=\"mb-30\"><\/div>\n<\/div>\n<div class=\"fdrlst__b89e9-71c0dd8cd0eccf8c932614da3db900fd fdrlst__b89e9-paragraph-2\" id=\"fdrlst__b89e9-71c0dd8cd0eccf8c932614da3db900fd\"><\/div>\n<p>The California example provides practical confirmation of the \u2062theories behind \u200ba separate Congressional Budget Office (CBO) \u200dreport\u2062 on federal legislation increasing\u200c the minimum wage: namely, that hiking mandated wages\u200b encourages firms to operate more efficiently\u2063 \u2014 by laying off and replacing workers.<\/p>\n<h2 class=\"wp-block-heading\">Outsourcing and Price Increases<\/h2>\n<p>Approximately 1,200 Pizza Hut delivery drivers\u2063 got a very unhappy present \u2062just before Christmas. Two franchisees told them\u200b they would lose their jobs due to \u200bthe \u2062higher minimum wage. In a notice to federal authorities publicizing the\u2062 layoffs, the franchisees <a href=\"https:\/\/www.businessinsider.com\/california-pizza-hut-lays-off-delivery-drivers-amid-new-wage-law-2023-12\">said<\/a> they had \u201cmade a business decision to\u200b eliminate\u2064 first-party delivery services \u200cand, as a result, the elimination of\u200d[[<em>sic<\/em>]all <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/pizza-hut-to-lay-off-over-1200-workers-in-california-as-state-raises-fast-food-minimum-wage-to-20-an-hour\/\" title=\"Pizza Hut to cut 1,200+ jobs in California due to \/hr fast food minimum wage hike\">delivery driver positions<\/a>.\u201d<\/p>\n<p>In other words,\u2063 the \u200drestaurants are outsourcing their delivery options \u200bto places like DoorDash, Uber Eats, and GrubHub to \u200davoid paying more workers the\u200d higher minimum wage. That change may help Pizza Hut minimize the cost effect of the new California mandate, but it\u2062 could sock customers with additional charges and fees imposed \u2062by \u200cthe new third-party delivery services.<\/p>\n<p>Likewise, Business Insider <a href=\"https:\/\/www.businessinsider.com\/california-pizza-hut-lays-off-delivery-drivers-amid-new-wage-law-2023-12\" target=\"_blank\" rel=\"noreferrer noopener\">reported<\/a> that chain restaurants like Chipotle and McDonald\u2019s have \u201cplanned to pass\u2062 the costs \u200dof higher wages in \u2063California to customers by raising menu prices.\u201d In other\u2063 words, if the\u2062 <a href=\"https:\/\/thefederalist.com\/2023\/09\/19\/falling-household-income-numbers-show-how-bidenflation-has-hit-americans-wallets\/\" target=\"_blank\" rel=\"noreferrer noopener\">pain of \u201cBidenflation\u201d<\/a> over the past \u2063three-plus years \u200dhasn\u2019t already proved enough for Americans to handle, California\u200b families will have to dig still deeper into their wallets for a heretofore \u2063inexpensive meal\u200c treat.<\/p>\n<div class=\"fdrlst__b89e9-758a6dc551827718bcb334c12b197609 fdrlst__b89e9-paragraph-6\" id=\"fdrlst__b89e9-758a6dc551827718bcb334c12b197609\"><\/div>\n<h2 class=\"wp-block-heading\">Federal Mandate Will Increase Unemployment<\/h2>\n<p>The stories out of California \u200ccome on the heels of \u2064the <a href=\"https:\/\/www.cbo.gov\/system\/files\/2023-12\/The_Budgetary_and_Economic_Effects_of_S.%202488_the_Raise_the_Wage_Act_of_2023_1.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">report<\/a> CBO \u200dissued in December on a federally imposed minimum wage. The budget gnomes\u200b examined \u2062the potential effects\u200c of passing <a href=\"https:\/\/www.congress.gov\/bill\/118th-congress\/senate-bill\/2488\/text?s=1&#038;r=1&#038;q=%7B%22search%22%3A%22s2488%22%7D\" target=\"_blank\" rel=\"noreferrer noopener\">legislation<\/a> \u200dto raise the federal minimum wage, in increments, \u200dup to $17 in July 2029.<\/p>\n<p>While the budget office did conclude that net wages paid would increase overall,\u2062 and the number of people\u200b in poverty \u2062would decline slightly, these changes \u2064would come \u2064at the cost of several important \u2064economic factors:<\/p>\n<ul>\n<li>Higher wages would increase employers\u2019 costs for producing goods and services.<\/li>\n<li>Employers would pass \u2062some of these increased costs on to consumers in the\u200c form of higher prices.<\/li>\n<li>Those higher prices, in turn,\u2063 would lead consumers to purchase fewer goods and services.<\/li>\n<li>Employers would consequently\u2062 produce fewer goods and services, and,\u200b as a result, they would tend to reduce their employment of workers at all wage levels.<\/li>\n<\/ul>\n<p>Less consumption \u200cand higher inflation \u2014 not exactly hallmarks of economic strength.<\/p>\n<p>In addition, CBO estimated that\u200b the projected\u200b increase in unemployment\u2063 (700,000) would exceed the reduction \u200din\u2063 the number of\u2063 individuals in poverty\u200d (400,000). Half of the 700,000 who become unemployed due to the minimum wage rise would drop out of the\u200d workforce,\u200d CBO estimates. \u201cYounger,\u2064 less educated people would account for a disproportionate \u2064share of those reductions \u200bin employment,\u201d according to\u2063 the report.<\/p>\n<div class=\"fdrlst__b89e9-e40c782ab9be4258a5f6a378e75c8b75 fdrlst__b89e9-paragraph-10\" id=\"fdrlst__b89e9-e40c782ab9be4258a5f6a378e75c8b75\"><\/div>\n<h2 class=\"wp-block-heading\">The Deficit Would Rise Too<\/h2>\n<p>The fiscal effects \u200cof a federal minimum\u2062 wage increase would\u200b also prove\u200c damaging, according to the CBO report. Overall, deficits would rise by an estimated $46.3 billion over 10 years. Among \u200cthe major effects, there\u200b would be \u2062higher spending on Medicare, Medicaid, \u2063and \u2063Obamacare payments caused \u200dby rising \u200bhealth care prices \u200b(nearly $30 billion).\u200d Additional spending\u2064 on unemployment compensation (just under $15 billion)\u2062 would outweigh any increase in \u200bpayroll and\u2064 income \u2063tax revenue from people earning\u200c higher \u200dwages.<\/p>\n<p>Leftists may claim that\u200d a deficit increase \u200bof\u2062 \u201conly\u201d $46\u2062 billion over a decade \u2063represents chump change in the larger scheme \u200dof\u2063 things.\u2062 But with \u200dthe federal government \u2062already over $34 trillion in debt, and CBO projecting \u2062that a\u2063 minimum wage increase would\u2063 also cause interest rates to rise,\u2063 the \u2063legislation introduced\u200b by \u2064Sen. Bernie Sanders, I-Vt., represents yet another socialist scheme that Americans can\u2019t afford.<\/p>\n<h2 class=\"wp-block-heading\">Everyone Pays in the\u2063 End<\/h2>\n<p>Just \u200blike the \u200dPizza Hut workers before Christmas, Californians will soon \u200bfind the \u2064truth \u2062in the adage that there is no such thing as a free\u2063 lunch. \u2062Higher\u2062 prices and layoffs will accompany\u2063 the new statewide restaurant\u200d mandate, \u200bjust as they would if Congress accedes to a national minimum\u2062 wage hike.<\/p>\n<p>Instead, \u2063lawmakers would fare \u2062far better \u200dby cutting\u2063 wasteful government\u200d spending \u200bto stop the\u2064 soaring \u2063inflation that has <a href=\"https:\/\/thefederalist.com\/2023\/09\/19\/falling-household-income-numbers-show-how-bidenflation-has-hit-americans-wallets\/\" target=\"_blank\" rel=\"noreferrer noopener\">eaten into American\u2062 workers\u2019 paychecks<\/a> \u200bover the \u200dpast several years. That effort wouldn\u2019t just \u200damount to \u2062giving Americans a raise \u200d\u2014 it would also improve our increasingly bleak fiscal\u200c future.<\/p>\n<div class=\"fdrlst__b89e9-8b9283b24d1e219934a4d95478ba626b fdrlst__b89e9-after-post-content\" id=\"fdrlst__b89e9-8b9283b24d1e219934a4d95478ba626b\"><\/div>\n<hr class=\"wp-block-separator\">\n<\/div>\n<p> <\/p>\n<h2> \u200b How \u2064would a higher minimum wage impact businesses and employment in the long run, as\u2063 demonstrated \u2063in California?<\/h2>\n<p><span>  E would also be significant. \u200bAccording to the CBO report, the federal deficit would increase by $54 billion over the\u2063 next decade. This is due to the increased costs for federal \u2062programs such\u2063 as Medicaid and the Earned Income \u2063Tax Credit, which would be necessary to offset \u2063the higher wages.<\/p>\n<p>Furthermore, the report \u2063also highlighted that\u2064 a higher minimum wage\u2063 would have \u200ba negative\u2063 impact on the \u2062economy in the long run. It would lead to\u200b slower economic growth and reduce the nation&#8217;s capital stock. As\u2063 a result, productivity would decline,\u200c and businesses would face greater\u2062 challenges in \u200cexpanding and creating new jobs.<\/p>\n<p>This is not \u2062to say that \u200dthere are\u2064 no potential benefits to raising the minimum wage. Supporters argue that it would reduce income\u200d inequality \u200cand lift more people out of poverty. However, the economic consequences\u2063 outlined in the \u2064CBO report and demonstrated in California serve as a reminder that there are\u2062 trade-offs to consider.<\/p>\n<p>In a time when the \u2063nation is still recovering from the effects\u2062 of the pandemic, it \u2063is crucial to approach policy decisions\u2063 with\u2063 a clear \u200bunderstanding of their economic impact. While the intent behind increasing the minimum wage may be noble, it is \u200dessential to \u2063carefully consider the potential consequences it may\u200c have on businesses, employment, and\u2062 the overall economy.<\/p>\n<p>Ultimately, the residents \u200din California are now witnessing firsthand the economic\u2064 consequences of taxation. The increase in the minimum\u2063 wage has led to job losses \u200cand price \u2063increases, putting a strain on\u200c businesses and consumers alike.\u200c As policymakers \u200cconsider similar actions\u200b at \u200cthe federal level, it is crucial to \u200ctake into account the lessons learned from these \u2064<a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/biden-vows-to-take-effective-action-against-anti-semitismwhile-ignoring-these-democrat-anti-semites\/\" title=\"Biden Vows To \u2018Take Effective Action\u2019 Against Anti-Semitism\u2026While Ignoring These Democrat Anti-Semites\">real-world examples<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In California will be required to pay their employees a minimum wage of $15 per hour. As a result, many restaurants are reducing their workforce to offset the increased labor costs. This serves as a reminder that when you impose higher taxes or regulations on businesses, it often leads to unintended consequences such as job cuts and reduced economic activity<\/p>\n","protected":false},"author":521,"featured_media":2158816,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[546],"tags":[],"class_list":["post-2158815","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-federalist"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2158815","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/521"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2158815"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2158815\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2158816"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2158815"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2158815"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2158815"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}