In California, a Foster’s Freeze location closed and laid off its workers due to a new $20 per hour minimum wage that took effect April 1st.
The wage increase was mandated by Governor Gavin Newsom under a law raising the fast food minimum wage by 25% to $20 an hour.
The assistant manager said the owner could no longer afford the higher salaries.
Some employees initially thought it was an April Fool’s joke. Prior reports indicated many California restaurants had already begun layoffs anticipating the wage hike.
While economists debate the impacts of minimum wage increases, the restaurant industry is often hardest hit due to tight profit margins.
California currently has the highest unemployment rate in the US at 5.3% as of February, indicating the minimum wage law has led to job losses.
