After just three years of annual, state-mandated minimum wage hikes, California businesses are already beginning to feel the pain.
As a tremendous tax burden and an ever-increasing cost of living began exacting their toll on state residents in recent years, the California legislature voted to impose a scaled 50 cents per year minimum wage increase beginning in 2017, Forbes reported. However, after 2019, the minimum wage will increase by one dollar per year.
The goal of the legislation was to see all California workers making a so-called “living wage” of $15 per hour by 2022 should they be employed by a company with 26 or more employees or by 2023 if they are employed by a smaller business.
According to KOVR, however, a number of Sacramento workers have already found out they will not be making the $12 and $13 per hour wage they were slated to make come January 2020.
Instead, they will be making nothing, as the sometimes decades-old small businesses that employ them proceed in droves to permanently close their doors to the public.
The 14-year-old Greek restaurant Opa! Opa! is one such business.
“The wages are definitely a heavy pressure on us,” restaurant owner Phil Courey told KOVR.
According to Courey, the wage increases have cost his business approximately $40,000 more every year since the legislature passed and another increase would be crippling.
As a result, Courey has decided he will be closing his doors on Dec. 29 in order to give loyal customers one last opportunity to stop in throughout the Christmas season.
But Opa! Opa! is far from the only local staple closing up shop with yet another wage increase looming large.
In fact, several well-known haunts — including Fat City Bar and Café, an art-deco themed restaurant established in the city’s historic downtown in the 1970s, and the more than 50-year-old original Perry’s restaurant — have already closed their doors.
“California is a rough state to do small business,” Perry’s restaurant owner Paul Fraga said. “[The legislature wants] everybody to make $20 an hour, but for the smaller guy, I can’t afford that.”
None of this should come as a surprise to anyone with even the most fundamental understanding of economics.
Nor should the closing of more hometown favorites across Sacramento — or the state of California as a whole — come as a surprise, for that matter.
This was bound to happen.
A state with high costs of living and an even higher cost of doing business is good for absolutely nobody.
Sure, the left would have you believe such things are good for the poor or the working class. And if you tilt your head and sort of squint at the situation, you might begin to see things their way.
But the illusion fades when you remember the fact that higher wages only help the working class if they are, you know, working.
When that same wage is artificially driven up to an arbitrary height no reasonable small business can sustain, business owners are bound to do one of two things: raise their prices or fire employees.
The former will, of course, only result in a smaller customer base, in turn driving the company under.
The latter, on the other hand, will protect the business. But only until the next year, when the minimum wage increases once again and more laborers must be laid of. Eventually, the company will no longer have the staff to continue operating.
Are we sensing a pattern here? It seems all roads lead to small business closure.
Unsurprisingly, however, California’s left-wing “leadership” does not seem to care less about this.
To them, business owners are at the beck and call of the state, and they should either do things the government’s way or hit the highway.
Raise the Wage chairwoman Tamie Dramer took that ideology to the extreme in November, dismissively telling KTXL, “If you’re going to run a business, you should have a business plan that accounts for you paying your employees a living wage.”
Someone apparently hasn’t read any Ayn Rand.
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