Fast food businesses in California struggling due to new minimum wage law

California’s fast-food minimum-wage law is causing issues for businesses, not just jobs, in Week One.

Iconic SoCal soft-serve establishment Fosters Freeze has closed its Lemoore, Calif., operations due to the new requirement that fast-food workers receive $20 an hour.

The employees were informed of the closure when they arrived for their morning shift.

This gives a new, negative meaning to the phrase Hiring freeze. 

As predicted by almost anyone with basic math skills. 

When the cost of labor goes up, businesses have to reduce their usage of it or increase prices. Otherwise, like Fosters Freeze in Lemoore, they have to close. 

It’s worth noting that in Governor Gavin Newsom’s efforts to change California’s economy, there are exceptions. 

For example, Panera Bread received a unique exception in the law, likely due to his connection to a Panera business associate. Another exception is a restaurant Newsom owns, PlumpJack Cafe in Olympic Valley near Lake Tahoe, offering a wage of $16 for a busser position. 

Since PlumpJack does not meet the criteria set by the fast-food law, this is legal but questionable. 

Even though Newsom is no longer directly involved, his family is connected to the restaurant’s corporate ownership. 

Despite his understanding of the impact of high wage laws, Newsom is aware of how detrimental they can be to workers and business owners.