California's looming $20 minimum wage set to cause layoffs: Fast food franchisee

California Governor Gavin Newsom has a little catchphrase he loves to repeat. Quote, as goes California, so goes the rest of the nation. But if that's true, you should be afraid. Hella afraid. His own administration admits it's facing a $38 billion budget shortfall. However, the nonpartisan Legislative Analyst's Office says that number could be nearly twice as high. Whoops. And while Newsom loves to brag about how many jobs the Democrats have created over the years, his own state now has the highest unemployment rate in the entire nation at 5.3%. And it was dead ass last in job growth for all of 2023. And his new minimum wage hike has only made matters worse. But lying about job creation is just par for the course for these Democrats. Don't compare me to the almighty. Compare me to the alternative. We added 12 million jobs. That's just counting the lawyers that defended the president. Quick little fact check. Biden didn't add 12 million jobs. He just added back the jobs that were lost during the pandemic because of the Democrats' lockdowns. So sadly, yes, so goes California. So goes the rest of the nation. Right down the tubes. For more on California's minimum wage hike, let's bring in Scott Rodrick. He's a board member on California Alliance of Family-Owned Businesses and owns 18 McDonald's restaurants in Northern California. Thank you for joining us and congratulations on surviving this long in California. What do you make of these big proclamations that Democrats and Gavin Newsom have created, all these jobs that in fact you created? Well, the outcome of the proclamations that have been made now is that 15,000 franchise restaurants throughout the state of California will open for business on Monday, literally walking towards a government buzzsaw. And the vast majority of those restaurants are family-owned and operated, like my restaurants. I underscore family-owned because franchisees are not large global corporations. Our brands might be national, but franchisees are local businesses. So what is happening on April 1st, as you're now reporting, is unprecedented in California, let alone in any state of the union. We're talking about a massive 25 percent mandated wage increase targeted solely to fast food employers, family-owned businesses like mine. So simply put, 25 percent overnight when we open for business on April 1st. The other unprecedented element of this really poorly conceived legislation is that it is so discriminatory by its nature. Politicians in California have literally picked winners and losers with the stroke of a pen. I mean, talk about blowing up an even playing field. From my perspective, I believe that a fair wage for one should be a fair wage for all. And that means if you're an entry-level employee working in a retail store, working in agriculture, a teacher's assistant, and yeah, someone who makes Big Macs, a fair wage for one should be a fair wage for all. Scott, the thing that I think I can speak for Charlie as well, that we can never get our heads around, is that these policies are created by politicians and bureaucrats. And it always seems as if they never actually talk to the business owners and the operators and the families that run these businesses. And they are told over and over again, this is what's going to happen if you raise the minimum wage, and they do it anyway. And then the layoffs have already started. You're absolutely right, Degan. The repercussions have already started. While this new legislation goes into effect April 1st, we've literally seen something on the order of 1,500 delivery drivers that work for Roundtable and Pizza Hut being laid off. There's 18 Subway sandwich shops, family-owned, that were operating around my restaurants up in Northern California that closed in the middle of the night at the end of February. So I fear that what is going to happen post-April 1st is literally going to be an awful impact to small business owners. And sadly, now that the water is under the bridge, because there's no going back to changing the legislation, the best that I can do is not only trying to survive and thrive, because I've been in this business now for 30 years, but perhaps through my experience serve as somewhat of a harbinger, a canary coming out of the coal mine, to warn other small business owners around the country that you have to be vigilant, you have to be proactive, you have to be engaged in the political process, because only you and your family will be able to protect your hard-earned equity and your cash flow. And without cash flow, I can't create jobs and keep jobs in the communities that I do business in. I'm assuming you've probably already had some of those conversations with some of your beloved employees. Well, you know, the number one question that employees have been asking, whether they be in my restaurants or around the cities that I operate in, is what is going to happen to my job? Will my hours be cut? Are you going to close the restaurant? And frankly, given all the choices I have in terms of surviving, let alone thriving post-April 1st, the last thing, at least in my organization that I'm thinking about doing, is impacting the biggest asset that I have in my restaurants, which are people. I mean, people make hamburgers, people smile to customers, people work in my restaurants. They don't run themselves. And so I'm going to try to do everything I can to somehow survive. I can't speak to other franchisees. There's literally 15,000 restaurants operated by, I'm guessing, something like 2,000 different families throughout the state. They're going to have to unpack whether they survive through price, being more aggressive in seeking labor efficiencies, making hard choices around CapEx, deferring the HVAC on the top of the roof, or asking the landscaper to come every other week instead of every week, or not investing in a $35,000 grill. I mean, everything has to be on the table for small business owners like myself. Scott, keep talking. Keep talking, Scott Roderick, and you're welcome back anytime. Thank you so much for being here today. You're a great patron. Thank you. Yes, indeed, sir. Thank you, Degan. Thank you, Charlie. Appreciate it.