California’s Minimum Wage Battle: Celebrity Chef Condemns Proposal & Predicts Restaurant Shutdowns

As part of her campaign for the United States Senate, Rep. Barbara Lee, D-Calif., is advocating for a federal minimum wage hike to $50 per hour.

Given the significant disparity between this sum and the existing federal minimum wage of $7.25, her initiative has sparked widespread interest.

Among the naysayers is renowned chef and restaurant owner Andrew Gruel, who expressed serious worries about the concept during an interview with Fox Business.

“This would completely decimate every single business in the state of California,” he claimed, suggesting that only a small proportion of high-end retail businesses could survive a $50 per hour minimum wage.

Gruel claims that California has thousands of state employees and challenges the state to set an example by immediately raising those workers’ wages to $50 per hour.

“They can’t afford it,” he said, emphasizing the financial impracticality of the pay hike.

Furthermore, Gruel proposed an alternative strategy for increasing workers’ earnings without raising wages: lower payroll taxes to raise net take-home pay.

However, he stated that this method will not be pursued, attributing the decision to the same financial restrictions.

Widespread Closures or Price Increases?

Gruel investigated the possible financial turmoil for eateries, highlighting how increasing labor expenses could put enterprises in financial difficulties.

“To ask a restaurant, which in a phenomenal scenario is profiting 10% on, let’s say, 30% labor costs, to double their labor costs to 60%. That means they’re going to be net negative 20%,” he argued, concluding that “every single restaurant will close overnight.”

California's Minimum Wage Battle Celebrity Chef Condemns Proposal & Predicts Restaurant Shutdowns

To put things in perspective, California already has one of the country’s highest minimum wages, at $16 per hour. Furthermore, fast-food restaurant workers in the Golden State will have their minimum pay boosted to $20 per hour on April 1, 2024.

Gruel isn’t the only restaurant owner concerned about growing labor costs. Andrew Wiederhorn, chairman and creator of restaurant operator FAT Brands, has warned consumers to expect higher dining costs as minimum wage increases take effect.

“Someone’s got to pay for it and the restaurant operators don’t have the margin for that,” said Wiederhorn. “So, prices are going to go up.”

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‘The Worst Run State’

Gruel also criticized California’s administrative efficiency. “California is the worst-run state,” he declared.

The Golden State does encounter obstacles. Lee’s push for a $50 minimum wage is centered on the rising expense of living in the state.

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During a Senate debate on Feb. 12, she said that a United Way analysis revealed that a family of four living in the San Francisco Bay Area would require $127,000 per year just “to get by.” (According to a 2022 United Way Bay Area estimate, a family of four would require $109,088 to cover their necessities.)

An individual who works 40 hours per week at $50 per hour will make $104,000 per year. To put things into perspective, the Census Bureau estimates that the typical household income in America will be $74,580 in 2022.

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