Gavin Newsom is claiming that raising the minimum wage for fast food joints is increasing jobs. What is he smoking?
“While Shake Shack did not respond to requests for comment regarding the impact of California’s $20 per hour fast food minimum wage that took effect earlier this year, high commercial rents combined now with even higher labor costs have driven other fast food chains, including Rubio’s and Blaze Pizza to shutter stores.
“These closings are expected to optimize the Company’s footprint in these states and maximize profitable growth moving forward, and are not anticipated to impact the Company’s plans to open additional Shacks in these states,” wrote the company in its SEC filing. “The Company currently does not anticipate closing any additional Shacks based on this evaluation for the foreseeable future.”
Yes, these workers will be allowed to transfer to other stores. But, they will be filling vacant jobs—not creating new jobs. What is California in an economic collapse? Newsom/Democrat policies.
Shake Shack shuttering six California locations after $20 fast food minimum wage
- By Kenneth Schrupp | The Center Square, 8/29/24 https://www.thecentersquare.com/california/article_51528a7c-6658-11ef-8941-37b777f704b9.html?a?utm_source=thecentersquare.com&utm_campaign=%2Fnewsletters%2Flists%2Ft2%2Fcalifornia%2F&utm_medium=email&utm_content=read%20more
(The Center Square) – Shake Shack announced the pending closure of nine locations nationwide, six of which are in California, writing, “These Shacks are not projected to provide acceptable returns in the foreseeable future,” in a SEC filing.
While Shake Shack did not respond to requests for comment regarding the impact of California’s $20 per hour fast food minimum wage that took effect earlier this year, high commercial rents combined now with even higher labor costs have driven other fast food chains, including Rubio’s and Blaze Pizza to shutter stores.
“These closings are expected to optimize the Company’s footprint in these states and maximize profitable growth moving forward, and are not anticipated to impact the Company’s plans to open additional Shacks in these states,” wrote the company in its SEC filing. “The Company currently does not anticipate closing any additional Shacks based on this evaluation for the foreseeable future.”
California Gov. Gavin Newsom’s office says fast food hiring is up, claiming 11,000 fast food jobs have been added since the new minimum wage went into place on April 1, 2024.
“What’s good for workers is good for business, and as California’s fast food industry continues booming every single month our workers are finally getting the pay they deserve,” said Newsom in a statement earlier this month announcing the hiring numbers. “Despite those who pedaled lies about how this would doom the industry, California’s economy and workers are again proving them wrong.”
Shake Shack told Restaurant Business these are the chain’s first non-construction-related store closures. With hundreds of national locations, the closures are not a major downsize; those working at the six California, two Texas, and Ohio stores shutting down have been offered transfers or compensation packages of up to 60 days of pay, the filing stated.
The wage increase to $20 per hour is not what caused the fast food industry in California to fall on hard times. It may be the last straw in some markets but not all. The industry is stifled by rules regulations and the Union. Read “Personal Opinions of One Common Man” available online from Amazon, Barnes & Noble and Walmart.
People who would eat at these fast-food establishments have left California for saner red states. Perhaps that is why so many locations are closing.
Where are the new jobs being created by the minimum wage increase? I must be missig something?
Have Newsome name the new jobs that are being created and where they are being created!