If you go back in time a couple of decades, you’ll see that California is usually the place where states got their ideas for laws. Now, it wasn’t that way with the minimum wage law, which actually started in Massachusetts, but Cali has been known for writing a lot of state laws first, and later having them be adopted by a lot of other states. And that was the way that it was supposed to be. The states could act as a testing ground for new laws. Those that worked were adopted around the country, and those that weren’t only hurt one state for a while.
The Golden State is teaching the rest of the country a huge lesson in economics these days. You’re aware of, I’m sure, the new $20 an hour minimum wage that went into effect back on April 1st. That was a 25% increase over the previous $16 an hour minimum wage. However, unlike other minimum wage laws, this one only effected the fast food industry, and only those franchises that have 60 or more locations around the country.
What California has done was create a special tax on franchisees. If you own a Burger King or Arby’s or McDonald’s, you have to pay the $20 to all of the workers there. If you own a Bob’s Backyard Hamburger shack, you can still pay $16 an hour. What’s the outcome going to be? We’re already seeing it. Franchisees are letting their staff go in bundles as they adopt new technology that allows you to order at kiosks, pay with a credit card, and have a robot cook your food. Basically, each restaurant can be staffed with one person. So, while the minimum wage for these workers goes up, the number of workers that will actually receive it goes down. In some cases, WAY down.
Now, if California were smart, they would have realized that there are two types of people that work at these franchised restaurants. You’ve got teenagers just starting out in the business world. They are learning how to work, and they are saving money maybe for college, maybe for a used car, or something else. It’s not a “living wage” for most of these folks. It’s a part time, after school job, or a job during breaks from college.
Then you’ve got the guys that are working there that have a family. They probably rent their living quarters, and may have a couple of crumb-munchers as well. When you talk about “living wage” these are the people you are talking about. They are the under-employed. Maybe they are in that position because they never finished high school, or never journeyed to a local union shop to become an apprentice as an electrician, a plumber, or other skilled tradesman. And so, society has kicked them to McD’s to ask the age old question, “Do you want fries with that?”
These are the people that the law in Cali is intended to help. But its hurting everyone else that works at these jobs because the owners need to either cut staff to afford the cost, or raise prices to the moon to afford to keep them on. And it not only effects places with 60 or more locations nationwide. It effects EVERY small business. The grocery store that employees teens as baggers also needs to pay $20 an hour. Because if they don’t, they won’t be able to find anyone to do it. Everyone will be standing in line at the fast food place because they pay $4 an hour more than the locally owned and operated place of business.
Lately California has been making stupid laws like this. Yes, folks that are under-educated and unskilled probably need some sort of help to get by raising their families. But a teen working their first job? That person most likely isn’t worth $20 an hour, and their saving for college just got a lot tougher. No, you can throw this law right into the same bin as Cali trying to tax people for leaving the state and it follows them for up to a decade after they have left the state! The theory is that you made a good living here, we should share in it with you as you go somewhere else. It’s another law that isn’t going to be popular or get passed on to too many states. And it’s not having the effect of slowing the migration from Cali either.
The main thing to take from Cali’s new set of laws is simple. When government starts taxing people, they will not stop until they control your purse strings. And we need to learn that from the mistakes California is making.
Carry on world…you’re dismissed!
The Lone Cactus 
Seems to me there should be something unconstitutional about that unequal pay requirement? How many years did we hear about the discrimination of men getting paid more than women?
And I don’t suppose those robot burger flippers are paying into Social Security either…or state income tax?
So the next shoe to drop will be forcing employers and manufacturers to pay some sort of tax on each robot they use in their manufacturing process!
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Yeah, that’s a really good point. Cali thinks they are helping the poor burger flippers. But what they are doing is putting more of them on the unemployment line (getting state tax dollars for unemployment), while the restaurant owners are paying less in taxes because they aren’t paying the kiosks and the robots. So the state gets hit double hard. And isn’t California already in a world of hurt budget wise???
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Paying $20 an hour to the people you describe hurts them more than anyone else because I’ve noticed that whenever states require a cost-of-living wage increase, all it really accomplishes is yet another increase to the cost of living. It’s a zero-sum game, but it’s popular with politicians because they, in turn, mostly spew their idiocy toward idiots.
And the world turns.
I wonder who in their right mind wants to pay $50 for a Happy Meal for four? What I notice where I live is that Wendy’s appears to be doing okay (although I don’t know why), and Whataburger (my favorite) seems busy, but no one is driving through McDonald’s or Burger King. So it’s only a matter of time before those establishments close, at much pain to whoever owns the franchise.
It causes one to wonder whether the government should keep its nose out of the private sector.
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Well, I can tell you that Burger King’s largest franchisee has filed for bankruptcy recently. And BK corporate is in a world of hurt financially. They have been for years. As for McDonalds, I’d say you’re right…they have had their time in the sun, and others are nipping at their heels. I wonder though how much higher a “minimum” wage can go? All it does is drive the prices of everything up. Not a smart solution to the problem liberals seem to think we have.
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Here’s my take.
In 1979 I was a young assistant manager with Carl’s Jr Restaurants, working in the San Gabriel Valley, east of Los Angeles. My salary was $850.00 a month, about $5.00 an hour, roughly 75% above the minimum wage. My rent, at $256.00, was 30% of my gross pay.
At that salary rate I had a car, my own apartment and furniture. I paid all my own bills and had plenty of money left over to take my fiancé out a couple of times a week for dinner and/or a movie.
In Southern California.
Now let’s look at a young person making 75% above the minimum wage in the same community east of Los Angeles.
At the current minimum wage of $16.00 an hour, a 75% increase would bring someone to $28.00 an hour, $4800.00 a month. Using the 30% of gross rule common in real estate, and what most say is the upper limit you should spend on rental housing, you should spend no more than $1450.00 on your apartment.
That same apartment I rented back then is now $1950.00, out of reach.
A person making the minimum back then, $2.90, would gross out at $500.00 a month. He could’ve rented my apartment at $250.00 and with a spouse or girlfriend working another part time minimum wage gig, easily made rent, food and expenses.
Now? How is that possible.
Now of course we had lots of 16 year olds working 15 hours a week just for cash to go to the movies. But even back then, we had significant numbers of people trying to get out of Mom and Dad’s house who wanted that full time work, with fully paid health insurance. And they could make it happen, even in Los Angeles!
Those days seem gone forever because wages have not kept up with inflation like they used to. The formula has gotten out of whack in the US. Maybe it’s because employers chose not to increase pay sufficiently as prices when up. Maybe it’s something else.
I don’t know. But it seems like something needs to be done.
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Dave, you raise some really good points. I do want to mention though that if the guy making $4800 a month now also had a girlfriend making the same thing, they could afford that $1950 a month apartment. But you’re right in the overall scheme of things. Personally, I’ve always thought that the marketplace should set the wages, not the government. That way, if jobs were plentiful, employers would have to get into bidding wars because that’s what the market would demand. If times were tight in the job market, they could afford to loosen up the costs to the new hires. It certainly is different than what’s happening now, but it would match the economy. The situation you described doesn’t do that. Of course, Cali real estate prices are out of whack, aren’t they???
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Dear Lone Cactus, I just love your posts, so ‘on the money’ when it comes to the crazed antics of the leftists destroying our country and the reputation of the best President since George Washington. The only criticism I can hold against our greatest President – bar Donald Trump – is that he was too damn modest in leaving office when he did. When – not if – DT wins in 2024 he should remain in office for as long as he wants, and damn the Demorats! We won’t make the same mistake as we did on January 6! Glory to MAGA! Glory to Trump!
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Thank you Lowest! I certainly appreciate your comments! Though I would suggest Trump staying in office past January 20, 2029 might present a problem for him (and us?). But I get where you’re coming from. Just an FYI, as you probably know from reading my stuff, I’m a fan of Trump’s policies, but not 100% backing him on his deportment. He COULD act more presidential in my view. But he is SO much better than the joker he’s running against (all of them). Thanks again for the comments!
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Wow Lowe… How should DJT stay in office? How should he have stayed in office? Either action was/would be unconstitutional.
Is that what you are advocating?
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Methinks you’re not getting my point. Trump CANNOT (under current law) stay in office past January 20, 2029 under any circumstances. He will have served his two terms and that’s it.
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P.S. And can you really call $20 bucks an hour “minimum wage” when there are others out there doing the same job getting paid less? Hmmm?
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I remember when I used to get $1.40 an hour sweeping floors and cleaning toilets at a jewelry store back in my hometown. I didn’t complain about it. Of course, I wasn’t trying to make a house payment or a car payment either. I was only 14.
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