California Bans Low-Skill Jobs with new $20 minimum wage for fast food workers.
— Peter St Onge, Ph.D. (@profstonge) April 9, 2024
Mass layoffs are already being announced, while major chains pour money into store automation so they can keep running without workers.
Fast food is only the start; California's already going after… pic.twitter.com/AQLXKSQd4h
California just slapped a $20 minimum wage on fast food joints. Just days later, they are already announcing mass layoffs. That's in the state with the highest unemployment in the country [at 5.3% in February]. The bill, which The Wall Street Journal characterized as "crazy" in an op-ed by a labor economist, raises California's already high minimum wage from $16 an hour to $20 an hour. That would make it the highest minimum wage in the country. The bill also sets up a so-called Fast Food Council, authorized to raise that minimum wage by another 3.5% every year forever. So it could be $30/hour in a decade. In response, California food companies have frozen hiring and some are already announcing mass layoffs starting with delivery drivers now being outsourced to DoorDash and Uber Eats at least until they are gutted by a separate little California gem called AB40 that aims to destroy those jobs as well.
It's worth noting that there are currently half a million fast-food workers in California who are now on the chopping block. Those workers serve roughly 70% of Californians who get to face higher prices and abandoned locations. Already approximately 1100 Pizza Hut drivers are set to lose their jobs with more already announced at the pizza chain, Round Table. Of course, the drivers are just as startled at $20 bucks. Every employee is on the menu. Jack in the Box and Mexican chicken restaurant El Pollo Loco announced they'll be using robotics to automate cooking and cashier functions, including fry stations and making salsa. McDonald's has already put millions into designing fully automated stores opening their first fully robot store last year in response to the minimum wage hikes so there is no worker in the store at all. Because machines don't have a minimum wage, activists claim the companies are just playing games, and that there will be no layoffs, which is partly because they've never run a business, but mostly because the minimum wage is a reliable vote winner and throws workers under the bus. But by gum, it sounds good and it does get the votes.
2:10. So why does a minimum wage destroy jobs? In short, another way to phrase a minimum wage is a ban on low-skill work. In this case, any work that is worth less than $20 an hour. Unfortunately, there are many low-skilled workers in America. Thank a public school teacher who simply is not worth $20/hour. For example, a low-margin broom factory might make money at $14 an hour but it goes bust at $20. So if they cannot pay $14, there is no job at all. Of course, it's not just that the job is gone; it becomes literally illegal for those people to have any job if they're not worth $20 an hour. They'll either have to make do with cash under the table, perhaps hanging out at Home Depot waiting for day work or they will have to fall back on soup kitchens begging and welfare.
2:58. California is the leading edge of something that's happening all across the country, indeed all across the West, sacrificing low-income workers for socialist vote-buying gimmicks. There are 4 million fast food workers in America. There are over 50 million people who make under $20 an hour. All of those workers are now on the chopping block.
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