California’s Pernicious Food Tax

Sep 12, 2022 | Macro Insights, No Bull Economics

California’s AB 257 bill raises the minimum wage for fast food workers by 40% to $22/hr. As we outlined in a recent post, this defies financial reality. Further, the inherent inequality of this bill (targeting just some restaurants & not all retail outlets equally) was enough to prompt a sharp critique from McDonald’s US president. As if the fact that this afflicts 9% of all the restaurants affiliated with the $1B+ chains (most of which are owned by small franchisees) is not bad enough, the concern is that other states could follow California’s lead. This act reveals the hostility government has towards small businesses & the question is why? Rather than try to bankrupt small businesses, why not support & encourage them? As we discussed in this post, there are 32MM family-owned businesses generating 54% of the US private sector GDP. We have our work cut out to increase the financial acumen among legislators sufficiently to save the economy!

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