In a glaring example of how out-of-touch government officials can devastate local economies with ill-conceived policies, a McDonald’s in San Francisco has been forced to close its doors after decades of service. The culprit? California’s new minimum wage law, which raises the minimum wage for fast-food workers to an untenable $20 per hour.
Governor Gavin Newsom, in his typical fashion, celebrated this misguided legislation in 2023, claiming it would uplift the state’s 500,000 fast-food workers. “California is home to more than 500,000 fast-food workers who – for decades – have been fighting for higher wages and better working conditions. Today, we take one step closer to fairer wages, safer and healthier working conditions, and better training by giving hardworking fast-food workers a stronger voice and seat at the table,” Newsom proclaimed.
The reality, however, has been far from the utopian vision Newsom painted. The immediate impact of the law has been a wave of business closures, with the iconic McDonald’s in the Stonestown Galleria shopping mall being the latest casualty. Located near San Francisco State University, this restaurant had been a staple in the community for over 30 years. The combination of soaring rents and the unsustainable minimum wage hike rendered it impossible to keep the doors open.
The franchise owner, who took over the restaurant in 2014, expressed his frustration, stating that the minimum wage increase was “an extraordinary headwind against operating a successful, family-owned business.” He lamented, “It has never been as challenging in my 30 years of owning a franchise in California as it is today.”
In a heartfelt letter posted at the now-closed store, he wrote, “It has been a pleasure for my entire team and I to serve the 19th Avenue and Ingleside neighborhoods for more than 30 years. We are thankful to have been a part of your daily meal routine, either for an Egg McMuffin in the morning or a Happy Meal with the kids after an afternoon of shopping at Stonestown.”
Proponents of the wage hike, such as California Assemblymember Chris Holden, heralded the bill as a historic victory. “Today, we witnessed the signing of one of the most impactful fast food wage laws that this country has ever seen. We did not just raise the minimum wage to $20 an hour for fast food workers. We helped a father or mother feed their children, we helped a student put gas in their car, and helped a grandparent get their grandchild a birthday gift,” Holden claimed.
Holden’s rhetoric, however, rings hollow in the face of the economic carnage his policies have wrought. The closure of long-standing businesses like this McDonald’s reveals a stark disconnect between the lawmakers’ intentions and the on-the-ground realities faced by business owners and workers alike.
David Huerta, President of SEIU California and SEIU USWW, echoed similar sentiments, praising the bill as a triumph for working families. “After ten years of vibrant and courageous activism, which included raising the minimum wage for all workers in the state and bringing billions of dollars into working families’ pockets, fast food workers have now achieved something historic,” Huerta said.
Yet, as we witness the fallout from this ill-advised policy, one must question: at what cost? The economic hardships imposed by such regulations, coupled with a lack of understanding of the business environment, are driving beloved local establishments out of business, hurting the very communities these politicians claim to support.
As the minimum wage law continues to wreak havoc, Californians are left to ponder whether their leaders are truly serving their interests or merely pushing an ideological agenda at the expense of economic stability and prosperity.
