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On the one hand, the new $20 minimum wage raised prices by just 3.7% and didn’t reduce jobs, according to a U.C. Berkeley/Institute for Research and Labor Employment study. That 3.7% increase indicates that customers absorbed 62% of the cost increase.
Same article reports that Gavin Newsom says the state gained 7,400 fast food jobs.
On the other hand…the Employment Policies Institute states that the UCB/IRLE study’s claim that the modest price increase reflected increases over just four weeks, from two weeks prior and two weeks subsequent to the wage hike. EPI states that prices rose over 10% in just seven months.
The same EPI states that California lost 6,166 jobs, as opposed to Newsom’s claim.
California Shed More Than 6,000 Jobs Due To Fast Food Wage Law
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Six months later, McDonald’s posted a 3% drop in revenue against the same quarter, year over year. Restaurant visits have “delined in the first quarter more than industry executives were anticipating…”
Both low- and middle-income consumers pulled back on their spending.
Slowdowns have been felt at Chipotle, Domino’s, Starbuck’s, Pizza Hut and KFC. Taco Bell and Chilie’s report increase in guest traffice…which is odd to me, because I had my single worst customer experience ever at Chili’s. Used to love the place, hour-long waits when we were in college. Then, they sold to Brinker, and large companies did what they do best, wring every single cent out of the customers by reducing the experience.
McDonald’s Earnings: U.S. Sales Decline in Shaky Economy – WSJ
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I genuinely hope they’ve picked it up. It used to be my favorite place back in the 1980s. Best fries in the world, hour long waits and frankly, comely waitresses.
Post-Brinker, bad food, no waits, indifferent service by below average people. Last time I went to Chile’s, they got all four orders wrong, I mean materially wrong. They redid it, got two of the four orders wrong. We left, went to In-N-Out, had a great meal for 1/3rd the price.
Haven’t been back. I wrote to both the owner of In-N-Out (Esther was alive at the time) and the CEO of Brinker. They both sent me coupons, $50 for In-N-Out, $75 for Chili’s. In-N-Out coupons were gone within a month, I gave the Chile’s coupons to my work frenemy.
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Arby’s closed 62 stores in eight states, firing 1,400 workers, including California, Delaware, Florida, Maryland, New Jersey, South Carolina, Tennessee and Washington. Sales down 6.3% in 2024 (all fast food sales were down 1%). They closed an iconic Hollywood location.
Arby’s pulls out in 8 states in largest fast food layoff of 2025 – 1,400 jobs gone overnight | Watch
QSR 50 2025: Top Fast-Food Sandwich Chains, Ranked by Sales – QSR Magazine
Arby’s, Wendy’s and Burger King are all expected to close further locations in 2026. Friend of mine owned four BK franchises, said business was tough but the $20/hr. wage minimum killed it.
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Similar story in Seattle. New Socialist mayor is pushing $21/hr minimum wage plus she is proposing penalizing business that close as a result. She is especially focused on grocery stores that close. Never mind that policy, rules and regulations are driving small businesses into bankruptcy.
People who love a high “livable” minimum wage don’t like self check out. Gee, I can wait to read comments from shoppers experiencing AI driven customer service robots. Input your project or shopping list and a bot will take you to the exact location of the products you want.
Shoot, 4 years ago a Hampton in near SJC airport was experimenting with a robot to deliver linens and other items to rooms after 5:00 PM. Granddaughters were chasing it around the hotel. 🙂 I guess this eliminates at least 2 perhaps as many as 4 jobs at the hotel. Easy choice, hire someone for $80k in salary and benefits or buy a robot that can work 24/7 without supervision for $150K.
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In Wilson and Mamdani, Americans are seeing the logical result of concentrating wealth and resources in the top 1%/.001%. Frankly, Kamala Harris would have won if she’d embraced the soak-the-rich narrative. She started to, then was clearly warned off by one or more of the 173 billionaires who have donated to Democrats since 2020. George Clooney, much as he hated Kamala Harris, hates high taxes. Gavin Newsom, one-time darling of the Progressives, is dead set against wealth taxes.
It’s a message that resonates with the masses. If you rob Peter to pay Paul, you will always have Paul’s vote. And the American electorate has become weaker and older, on average, with fewer and fewer able-bodied people and profitable companies to pay the freight. So, using the logic of noted bank robber Willie Sutton who said he robbed banks because “that’s where the money is” Wilson and Mamdani will take more from the wealthy, because that’s where the money is.
Both Wilson and Mamdani will fail, of course. They sold an economic vision to credulous masses that they can make their lives better. And in some small, soon-to-be-well-publicized ways, they will achieve it. But in the main, they won’t.
I’m particularly interested to see how they play to reduce prices at small grocery stores. Both Mamdani and Wilson have focused on grocery prices as a main concern. My father owned a small grocery store for 21 years. Margins are already very thin, they have almost no room for error, and you have to be an adept businessperson to squeak by. After 21 years, Dad sold the business to his store manager, who went bankrupt inside of two years.
But Mamdani and Wilson, two young idiots who’ve never run a business will solve that issue. Can’t wait to see how that works.
Incidentally, Wilson has publicly stated she wants higher taxes on businesses, higher capital gains taxes and she has criticized Washington’s lack of a state income tax. And Mamdani is calling for an end to “rugged individualism.”
Mamdani’s call to end ‘rugged individualism’ sparks backlash | Watch
Strong men create good times. Good times create weak men. Weak men create bad times. Enter the bad times.
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