California will see 48 restaurants in one chain close because of the new minimum wage law

June 5 – While it may sound good for the labor force to increase the minimum wage, California is finding out the hard way, it may not be the best for all businesses. 

A chain restaurant in the Golden State is closing 48 restaurants because it can’t keep up with the new minimum wage law. 

California increased minimum wage to $20 an hour in April.  

Rubio’s Coastal Grill filed for bankruptcy because of the hike. 

Pat Ryan of NewsTalk 103.7FM pointed out, “So gone are the people that are going to care for those lawns. Gone are the electric bills and the utilities that they’re paying. Gone are the employees. They’re going to have to find some other place in which to get paid here. Why does it matter? Because (PA) State Senator Tartaglione, a career politician, there is no such thing. She’s been at it for 30 odd years. Long after she leaves office will continue to get health care paid for for the rest of her life on the backs of taxpayers. She has no clue as to the pain that’s happening out in the real world USA. She wants a $20 minimum wage and when you see 48 restaurants closing up in California and all the things that are associated, all the feeder things. No more food trucks showing up. No more drivers’ routes going there and you want that in Pennsylvania, Senator Tartaglione? It’s time for you to go.”

Attorney Clint Barkdoll noted, “These 48 restaurants, that’s just one chain. They’re closing 48 locations and they specifically are citing the minimum wage law. That’s in addition to hundreds of other restaurants around California that are closing or have already closed that are citing the same minimum wage law. They’re just saying economics no longer work to run a profitable restaurant.”

Michele Jansen of NewsTalk 103.7FM added, “It’s hilarious. Tartaglione, first of all, knows nothing about running a business or anything like that. She has been involved with public service as they call it her entire career and in the Senate for 30 years now. So she’s very insulated from I think those realities and her own personal knowledge. Secondly, interestingly enough, she was responsible for the minimum wage raise in 2006. Then people will say it hasn’t been raised in so long. No. They missed the point. The government doesn’t belong in the business of getting between individuals who want to contract with each other for employment and for wages. That’s always been the problem with this and the other very interesting thing, of course, is that workers are in the catbird seat right now. It’s not like there’s so many workers and oh, they’re being taken advantage of, except, I guess if you look at a lot of the illegal workers, but the whole reason is they shouldn’t be here anyway and they don’t really have the legitimacy of having those jobs. So right now is the most ridiculous time to say that the minimum wage is a problem because most places are paying above the minimum wage right now and workers can demand higher wages and then secondly, the destruction and the damage it does to the economy when you can’t allow individuals to make these decisions, when you don’t have any care for how different businesses like smaller businesses, like independent places especially, and nonprofits, as we talked about are affected. It’s just an absurd cry of sympathy and empathy that isn’t really even needed right now.”

Barkdoll said, “Remember, too, there are a lot of these businesses that run on very thin margins. You take grocery stores, they operate on a margin of pennies on the dollar. They’re operating on volume. Certain restaurant chains, operate on the same model, and when you suddenly hike wages to $16 and $20 an hour, that model just no longer works and think about, just take this one chain, this Rubio’s so they’re going to close 48 restaurants, in addition to the hundreds of others out there that have closed now. Red Lobster, In and Out Burger is another one that’s closing a lot. Think about the local economic impact that has. So now suddenly, you have a vacant, blighted lot that’s going to be sitting on a city street somewhere. It may take years to redevelop that and then that becomes a drag on the local economy from a tax standpoint, from just blight. We know that’s a huge problem in cities. So there’s all these ripple effects that occur when these places close.”