Rubio’s Coastal Grill announces the closure of nearly 50 restaurants across California
Say adiós to a lot more jobs, because the $20 minimum wage hike that Gavin Newsom signed in April just forced the closure of nearly 50 Rubio’s Coastal Grill locations across the state of California, which is around one-third of its business within the state—Gavinomics strikes again.
From a report out at Fox News yesterday:
Restaurant chain shuts down nearly 50 locations in California following minimum wage hike
Rubio’s Coastal Grill, a California Mexican restaurant chain, announced the closure of 48 restaurants in the Golden State amid rising business costs.
The Los Angeles Times reported that the chain decided to shutter nearly one-third of its restaurants following a ‘review of its operations and the current business climate.’
Now, I’ve never eaten at a Rubio’s so I don’t know what the whole operation is like, but fast food employment statistics released in April of this year report that the average fast food restaurant business in the U.S. has 15.6 employees; if this is anywhere near accurate, we can get a rough estimate as to how many jobs were just eliminated between those 48 locations—it works out to be about 750 incomes (not to mention insurance coverages, and any other employee perks and benefits). Mind you, these are low income jobs, worked by people who are no doubt struggling to get by, or not getting by at all, in this Democrat economy. I would wager that the job losses of this little minimum wage hike stunt outpace any limited gains by far.
As you probably know, California is buckling under the weight of an historic multi-billion-dollar deficit, and Newsom is getting desperate—last month, Gavin unveiled his new budget which included $18 billion in “temporary tax hikes” to ostensibly help mitigate the crisis, almost all of which would be levied against private businesses. (But, experience and the news cycle tells us what happens to California businesses when they get hit with more taxation: they flee.) No doubt, Newsome believed that this legislated hourly pay increase for fast food establishments would mean additional tax revenue from individuals too—but clearly, he knows nothing about fiscal management and running a business, and a state government is a business after all, and we see how well, or more appropriately poorly, he’s run it—so now, he’ll be collecting even less tax revenue than before, with the added bonus of a whole bunch of new unemployment claims, welfare “benefits” applicants, etc. That deficit is just going to grow… and grow… and grow.
Here’s a point made by someone in the comments, and it’s absolutely spot on:
For profit companies are organized—wait for it— profit, not charity. It’s not their job to hire workers at some magic poverty eradicating wage, and they won’t when a legislated wage exceeds a worker’s productivity.
Image: DonkeyHotey, CC BY-SA 2.0, via Flickr, unaltered.