California’s latest minimum wage hike is already making things worse
Zachary Faria
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In a development that should shock absolutely no one, California’s newest minimum wage hike is going to lead to higher prices and smaller businesses being run out of business to the benefit of massive corporations. It’s just another day in progressive California.
California recently decided to hike the minimum wage for fast-food workers to a whopping $20 an hour. The state also created a council that could raise that minimum wage even higher every single year through 2029. Gov. Gavin Newsom (D-CA) celebrated this legislation as a win for fast-food workers and yet another sign of just how “fair” California is.
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We now already know that two popular fast-food franchises, McDonald’s and Chipotle, will be hiking their prices to make up for that cost. This comes as McDonald’s has admitted that low-income consumers have been eating out less often due to the strain on their finances. Chipotle has raised its prices four times since June 2021 and will be raising them again by an additional 18% due to this law.
But Chipotle and McDonald’s can handle that hike, even if some consumers can’t. Chipotle admitted that a federal minimum wage hike would be “manageable” two years ago. (So “manageable” that the company still didn’t want to do it unless forced by the government). In the aftermath of this California law, McDonald’s sees an opportunity to “actually accelerate our growth in California” because “we’re in a better position than our competitors to weather this.”
So, more consumers will be priced out of buying fast food as they worry about their own budgets, and smaller fast-food restaurants will be trampled by the expansion of major corporate chains, but at least fast-food workers will win, right? Not necessarily. McDonald’s is also looking to improve productivity to cut down costs in response to this move, and the clearest way to do so would be to continue automating restaurants with kiosks that allow customers to order quickly and efficiently. That means less of a need for employees, which means less of a need for some employees’ jobs.
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And, of course, even the ones who hold on to their jobs will see their purchasing power diminish as California drives up the cost of just about everything with artificial wage limits and a wealth of regulations that drive up costs for businesses. Does anyone really win here, other than corporate leaders at McDonald’s and California Democratic politicians who peacock around, claiming they are fighting for the working man?
This is how every massive minimum wage hike works, especially in California, where the ever-rising cost of living is driving low- and middle-class families out of the state. California just made millions of people’s lives harder and celebrated it as a win because California Democrats have no understanding of basic economics and don’t care whether their residents are actually benefiting from these policies or not.