SACRAMENTO, CA – This is not an April Fools’ joke. Restaurant operators and job creators have been raising the red flag for months, as they are concerned with the negative impact of the minimum wage hike. Capitol Democrats pushed for the passage of Assembly Bill 1228 (Holden, 2023) and Governor Newsom signed it into law.
Following Paneragate, media outlets from the New York Times to the Wall Street Journal have also been reporting that restaurant owners are bracing for the long-term effects of the 25% minimum wage hike, including reducing workers’ hours or worse, laying off thousands of workers altogether and replacing them with automation. Ultimately, additional wage costs will be passed on to consumers via higher prices in what one restaurant owner calls a “silent tax.” Sadly, many restaurants that cannot afford the wage hike are considering closing altogether.
“Get ready for $20 burgers and fries served up by robots,” said Senate Minority Leader Brian W. Jones (R-San Diego). “Governor Newsom, Democrat lawmakers, and special interests are completely responsible for the mass layoffs of fast food workers and collapsing businesses in California.”
This new law goes into effect just days after California was ranked number 1 in the country for unemployment.
“The implementation of this bill will have serious consequences for both small business owners and employees,” said Caucus Chair Kelly Seyarto (R-Murrieta). “We need to enable our small businesses to be successful and create jobs in California. This bill does just the opposite and furthers California’s inflation woes.”
“It’s already too difficult for families to be able to afford this state,” said Senator Rosilicie Ochoa Bogh (R-Yucaipa). “What we need to be doing is working to lower living costs and increase opportunities for growth, not the other way around.”
“As a small-business owner, I know that doing business in California is becoming increasingly difficult,” said Senator Brian Dahle (R-Bieber). “This was a big win for the labor bosses, but in reality, it hurts those trying to achieve economic mobility. This law will force businesses to reduce their employees' hours, automate services, or opt to do business in another state. It's unfortunate that labor activists are destroying California's economy and the entrepreneurial spirit that has always been a part of our state.”
Senator Dahle also delivered a veto letter to Governor Newsom urging him to veto AB 1228 last year.