Even as American business owners and consumers hear Donald Trump stress to FoxNews’ Maria Bartiromo that he’s being clear when he repeats erratic and mercurial tariff threats, even as free market economists worry that the Administration and Federal Reserve want to inflate the money system even more via artificially low interest rates that will harm the buying power of the fiat dollar, and even as the US economy struggles to recover from the smothering, shameful, society-damaging, and lives-shattering Biden policies, collectivist bullies on the state level not only refuse to learn the bitter lessons of government holding sway over private enterprise, they don’t even acknowledge those basic truths.
Case in point: California, where a new study tells us that the predicted has transpired, and the Gavin Newsom-promoted wage mandate of $20-per-hour forced onto most fast-food restaurant chains has, in a single year, killed 16,000 low-skill jobs, and prevented countless more from being created, even as it restricted options and savings for consumers.
Danielle Shockey reports for the Tampa Free Press:
“Brand-new quarterly data from the Bureau of Labor Statistics (BLS), analyzed by the Employment Policies Institute (EPI), has laid bare a grim reality for California’s fast food industry: the state has shed up to 16,000 jobs since Governor Gavin Newsom signed the $20 fast food minimum wage law, AB 1228, in September 2023.”
The state-forced increase in expenses for the same labor shot business and consumer prices up 25 percent, and, while some chains shut doors, others culled their workforce, cut hours, or switched to what previously had been too expensive an alternative: electronic kiosks.
For example, in June of last year, Fox Business reported on the Mexican food chain called Rubio’s Coastal Grill, which shut 48 – or one-third – of its locations as a result of the Newsom-pushed mandate.
Related: The Definition of Insanity: Biden, Dems Push For More Job-Killing 'Minimum Wage' Mandates | MRCTV
That’s a lot of teenagers Newsom and his pals robbed of their entry-level jobs, a lot of low-skilled workers who might not have numerous alternatives save welfarist government redistribution of wealth, or criminal activity.
But, hey, at least the California government made shoplifting of up to $950 worth of items a misdemeanor, meaning most culprits will be free to do it again (unless the state proves they are part of a large gang engaging in a widespread plot to steal).
And Rubio’s is just one of the real-world examples of this predicted outcome. The impact of this political intervention has been so damaging and so widespread, people have started tracking the number of restaurant closures, which surpassed the 1,000 mark by September of last year.
Is it any wonder that a recent survey showed that the majority of Californians believe the state policies are “headed in the wrong direction”?
Is it any wonder that reporters such as Michael Shellenberger on X recently reminded Gavin Newsom that the California crime rate has risen to 31 percent higher than the national average?
Notes Shockey:
“The numbers dovetail with a Berkeley Research Group study showing menu prices soaring 14.5% since the wage hike, nearly double the national average. An EPI survey of fast food operators post-implementation paints an even bleaker picture: 98% raised prices, 89% cut employee hours, 73% curbed overtime or shift pickups, and 70% reduced staff or merged roles.”
And if the mandate is not removed, more people will lose their jobs, fewer people will be hired, more business owners will lock-in the kiosk tech that, previously, they would not have used because it was too expensive, and customers will have to spend more.
“Looking to 2025, the pain persists—93% of surveyed restaurants plan further price hikes, 87% expect more hour reductions, 74% anticipate additional layoffs, and 71% will limit overtime.
Critics argue AB 1228, touted as a lifeline for low-wage workers, has backfired spectacularly.”
Yes, it has. And one need not be an instructor in the field of economics to know this would happen. The essential moral precept of free association is crushed by government mandates, and a government mandate on wages prevents buyers and sellers from expressing their interests and needs.
Workers sell their efforts and skills, while employers sell the workers the opportunities and the investments they have made to start the businesses and acquire the materials needed for the jobs. And, of course, consumers hire them all and would like to have cash leftover to use on something new, helping employ others.
Of course, Newsom and his Marxist allies parroted the tired old rhetoric of “helping the little guy” when they pushed their attack on private enterprise and the freedom of peaceful people to engage in voluntary contract. One might wonder how attacking people can be portrayed as “helping” them, especially when government only can function by taking tax money, even to write and pass these statutes.
Befitting their Marxist roots, Shockey notes that the politicians applied their wage mandate on the so-called “large national chains” with 60 or more national locations that also are doing business in the state.
But the big bully is not the employer – and, again, the final employer is the consumer, who reduces his or her demand when the price of a product is forced up by state diktat.
Shockey offers us evidence that Gavin Newsom either doesn’t understand this truism, or he doesn’t care.
“Newsom’s office has pushed back, citing earlier claims of job growth in the sector. But the latest BLS figures—unadjusted and seasonally adjusted alike—show a stark reversal, with California’s fast food employment plunging 2.8% from September 2023 to September 2024, against a national dip of just 0.52%. The state’s losses dwarf private-sector trends, marking the worst non-recession year for the industry this century.”
It is a shame that politicians such as Gavin Newsom do not leave people alone.
But at least he offers a lesson to the rest of us – a lesson in economic and ethical disaster.