The Golden State stubbornly disregards warning signs surrounding the wage hike policies advocated by progressive unions.
According to National Review, California recently rolled out a groundbreaking $20 minimum wage for fast-food workers. However, labor unions, and their radical activist allies, are now pushing hard to expand this wage rate into other industries.
In examining California’s wage policies, it becomes obvious that the likely outcomes have a predictable path. One notable case study highlights the consequences of a near-$20 minimum-wage model, which unfolded within the state’s purview.
In 2021, Unite Here Local 11, a prominent labor organization situated in Los Angeles, orchestrated a series of actions that resulted in a $17.64 minimum wage for hotel employees within West Hollywood. This wage floor represented the highest across the nation.
Not content with this achievement, the union swiftly expanded its advocacy efforts towards larger targets. These efforts eventually resulted in the adoption of this wage standard across all sectors within the municipality.
As a result, the lowest-paid workers in West Hollywood saw their wages shoot up very quickly. In 2021, they were making between $13 and $14 an hour (depending on where they worked), but by July of the next year, their pay had soared to as high as $19.08 an hour. This huge increase shows how changing policies directly affects how much people get paid for their work in specific areas.
But the downsides were swift and brutal for working-class people.
Many businesses reduced the hours they were open, let go of workers, or shut down their operations altogether. For example, Carmen Bolas, who owns a small business in West Hollywood, had to lay off 40 percent of her employees just to try to keep her business running after the wage increase.
Marco Capanni, who had to close his restaurant after 30 years, said, “For a small business like ours, meeting this new minimum wage is costing us thousands, which is the highest in the country. It’s really tough for us,” as reported by National Review. He wasn’t alone; about 85 businesses shut down in West Hollywood last year alone.
Seeing these effects, the city decided to study the impact of the minimum wage on local businesses and employees in February this year. The results were almost exactly as expected.
It found that 22% of hourly workers in West Hollywood lost their jobs, and an additional 17% had their hours reduced. Employers faced similar challenges. 42% had to lay off workers or cut hours and more than a third of businesses that reduced hours turned to technology to make up for the lost work.
West Hollywood was set for another wage increase in July, but over 50 restaurants asked the City Council to pause the hikes. In a 4-1 vote, the council agreed, postponing the increases until January 1, 2025.
While looking at what’s happening in West Hollywood gives a clear picture of what a $20 minimum wage does, California’s leaders can also see the same problems with the $20 minimum wage for fast-food workers.
Just a month after it started, businesses all over the state are struggling, just like in West Hollywood. These idealistic decisions didn’t just make people lose their jobs and have businesses close, but they also made things more expensive for customers, making the economy even worse.
Lawmakers don’t have to be intelligent to see what will happen with a blanket $20 minimum wage. They just need to talk to the people who are dealing with these economic problems every day. A move towards higher wages indirectly encourages automation, higher consumer prices, and financial flight to more hospitable areas.
The real and obvious question is whether California will acknowledge that its attempt to improve things with a “fair” wage has actually made the situation worse for everyone.
The post California’s Catastrophic Minimum-Wage Surge: A Recipe for Disaster Unfolds appeared first on Resist the Mainstream.
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Author: Greg Zink
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