Restaurants in Sacramento are closing up shop citing the impending Jan 1, 2020 minimum wage hike in California.
Some of these institutions have been in business for decades.
The new hourly minimum wage will rise to $13.
Compare California’s min wage to the “open for business” state of Utah. The Beehive state has a minimum wage of $7.50 and, guess what else—rising wages.
When money is respected, good things happen. That is exactly what’s happening in rich states like Utah.
Here’s the story of one businessman being hurt by the minimum wage hikes from Fox Business:
California’s minimum wage is set for 2020 at $12 an hour for companies with fewer than 25 employees. Because of the rising minimum wage, some restaurants are closing down, saying it’s too unaffordable to be sustainable.
Original Perry’s owner Paul Fraga told FOX Business’ Neil Cavuto on Tuesday his restaurant was open 24 hours for more than 51 years, but five years ago, he noticed something was wrong financially.
“I wasn’t making any money, and my sales were up 20 percent in those five years,” Fraga said on “Cavuto: Coast to Coast.”
Fraga took his books into a financial consultant to get them analyzed.
“I paid him $1,500 for him to tell me that I overpaid by anywhere from 5 to 6 percent,” Fraga said.
According to the California Department of Industrial Relations, California’s minimum wage has changed as follows:
- 2017 – $10 an hour
- 2018 – $10.50 an hour
- 2019 – $11 an hour
- 2020 – $12 an hour
Fraga said his cooks make more than the minimum wage, so little increases become a significant problem for him.
“For every dollar that goes up, it costs me around $40,000 to the bottom line, and that’s a lot,” Fraga said. “I can’t raise the menu fast enough to compensate that … California is a really rough place to run a small business … everything’s more expensive.”
Read more here.
Originally posted on Your Survival Guy.