$20 Minimum Wage For Flipping Burgers – California Globe

California Governor Gavin Newsom didn’t learn anything from PaneraGate. When his long time friend billionaire Greg Flynn called him to complain that the $20 minimum wage would hurt his fast food franchises, instead of working to overturn the new minimum wage, Gov. Newsom offered him an exemption from the law.

Flynn owns more than two dozen Panera Bread locations in California, as well as Applebee’s, Pizza Hut, Taco Bell, and Wendy’s.

It’s obvious that Newsom’s B.S. in Political Science is serving him well – he’s mastered B.S.

Newsom should have majored in Economics.

Under Newsom’s “leadership,” California is falling from the 4th largest economy (his claim) in the world to the 6th. If he tries to blame Covid for this dive as so many governors have, he will be reminded that he locked down the state’s businesses and manufacturing, schools and universities for nearly three years.

Fox reports California currently ranks as the 5th largest economy in the world.

“The California Business Roundtable is now projecting the state will drop below India for the world’s sixth largest economy later this year,” KRSO reports. “California has seen a drop in revenue the last two years, with a weakening tech sector and the highest unemployment rate in the country.”

A quick Econ 101 lesson is needed.

The Wall Street Journal reported:

California had 726,600 people working in fast-food and other limited-service eateries in January, down 1.3% from last September, when the state backed a deal for the increased wages. Total private employment in the state declined 0.2% over that period, according to state figures.

Economists have long debated minimum-wage increases’ effect on employment. A study by the nonpartisan Congressional Budget Office last December found that raising the federal minimum wage to $17 an hour from $7.25 by July 2029 could increase wages for more than 18 million people, but also could reduce employment by about 700,000 workers.

Higher wages mean higher costs for consumers. And that’s the real rub – cheap fast food will no longer be cheap.

Many consumers will choose to eat at Denny’s, which does not have to pay the $20 per hour wage. The Grand Slam breakfast will be cheaper than a Sausage McMuffin – an you are served at a table with a bottomless cup of coffee.

I worry about making that comparison because we know how leftist politics work – the fast food $20 minimum wage is the camel’s nose under the tent. Gavin Newsom and the state’s Democrat politicians will come for the entire restaurant industry.

Notably, the federal minimum wage is still $7.25 per hour.

Economist Milton Friedman frequently spoke against the minimum wage. When Congress increased the minimum wage in the 1960’s, Friedman said “Congress has just acted to increase unemployment.”

He continued:

“Does a merchant increase his sales by raising prices? Does higher pay of domestic servants induce more housewives to hire help? The situation is no different for other employers. The higher wage rate decreed by Congress for low-paid workers will raise the cost of the goods that these workers produce—and must discourage sales. It will also induce employers to replace such workers with other workers—either to do the same work or to produce machinery to do the same work or to produce machinery to do the work.”

Gov. Newsom may not be an economist, but surely he knows this.

Does he care? No.

Caught red-handed offering the $20 minimum wage exemption to his BFF, Newsom just signed AB 610 into law to clean up the original $20 minimum wage bill, as well as soften the blow for certain fast food establishments. AB 610 now exempts fast food restaurants located in the very locations which could most afford the $20 minimum wage increase because of how much more they charge: at casinos, airports, hotels, event centers, theme parks, museums, corporate campus cafeterias, and publicly owned lands including ports, piers, beaches and parks concessions.

Only the mom and pop and family-owned fast food restaurants will be paying the $20 per hour minimum wage – a “living wage.”

Friedman warned:

“The groups that will be hurt the most are the low-paid and the unskilled.”

“The loss to the unskilled workers will not be offset by gains to others. Smaller total employment will result in a smaller total output. Hence the community as a whole will be worse off.”

Friedman reminded us that fast food jobs don’t require much training, and used to be a traditional training ground for the unskilled. But not any longer thanks to the minimum wage laws. And every increase in the minimum wage hurts the low paid and the unskilled the most.

Any economist could have predicted, and Milton Friedman warned us so many years ago, fast food businesses are going to have to downsize their workforce, reduce employee hours, raise prices and automate more… all because Gavin Newsom and California’s Democrat lawmakers meddle in the private sector.

As Friedman famously said, “The rise in the legal minimum-wage rate is a monument to the power of superficial thinking.”