The Problem with California’s Minimum Wage Hike

Income & Prosperity Investing Research
by 

With California’s minimum wage about to go up by $4…

Several fast-food franchises have now signaled that prices will have to rise.

Of course, paying exorbitant wages for low-skill jobs will hurt consumers – making our cost-of-living crisis even worse.

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According to the New York Post…

McDonald’s has received HEAVY criticism over its Big Mac combo, which is priced at nearly $18 (among other many hikes).

But as Fat Brands chairman Andy Wiederhorn says:

“A restaurant operator makes anywhere from 5% to 15% the bottom line at the end of the day, and if your labor is one-third of your cost, so 30%, and you raise the wage from $15 to $20 or $25 over the next couple years, you’re almost doubling that cost. And so they’re going to have to raise prices.”

And he’s right.

This whole minimum-wage hike ends up backfiring in two ways.

First, businesses are forced to fire some of its employees.

That’s why Pizza Hut is laying off more than 1,200 delivery drivers in California.

And second, businesses will only eat so much of the cost.

So if you increase the cost of labor across the board…

The cost of goods and services will naturally increase.

This is the LAST thing we Americans need.

Prices have risen dramatically across the board.

And yet another price increase only makes matters worse.

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