Gavin Newsom’s Sunday Circuit on Affordability is Dishonest

California Governor Gavin Newsom was cornered by Dana Bash on CNN Sunday about California’s affordability crisis. She said she was out to dinner in Nashville and met a California couple who had moved to Tennessee because they could not afford rent, or to buy a home or start a family, or the cost of living. She paused to allow Governor Newsom to respond. He didn’t address her comment on the lack of affordability in California, and instead deflected claiming that population in California is up. “Yah, we’ve had hundreds of thousands of people move into California the last two or three years, so we’ve seen population growth.”

The only population group growing in California are illegal aliens, in what some call a “replacement” plan.

“We dominate now in every key industry,” Newsom claimed, “from AI, quantum, robotics, we dominate, to ag…”

“But people are struggling to afford things,” Bash interjected.

Gov. Newsom touted the state’s $20 fast food minimum wage as one of his most successful efforts to combat the affordability crisis. Imagine that… increasing the minimum wage in the state with the highest taxes, highest housing prices, highest gas prices, highest electricity and energy rates…

However, research shows Newsom’s fast food minimum wage law wasn’t as successful as he claims. A new report from the Employment Policies Institute (EPI) lays out just how harmful drastic wage hikes like this can be.

Notably, the research found that every $1 increase in the minimum wage could trigger price increases of up to 5.5%. This bared out after Newsom’s fast food wage law, which caused a 14% increase in fast food prices and 20,000 lost jobs, in addition to several weeks’ worth of lost pay for many workers who kept their jobs, but had their hours significantly cut.

“Newsom has touted the $20 fast food wage law, but the data consistently shows that the wage hike has done more harm than good,” EPI Research Director, Rebekah Paxton said. “The state’s fast food prices went up 14% after the law was enacted, and it put nearly 20,000 workers out of a job. It’s no wonder California has pushed affordability further out of reach for its residents.”

EPI continues:

Recent developments in California provide a real-world illustration of these dynamics. In 2024, the state raised the minimum wage for fast-food workers from $16 to $20 per hour – one of the highest state-level wage hikes to date. Within one year of implementation, fast- food prices increased by more than 14%.

These price increases are consistent with prior research on minimum wage pass-through effects and demonstrate how quickly wage mandates can translate into higher consumer prices.

“New data from the federal Bureau of Labor Statistics was released Thursday, revealing a staggering 36,565 fast food jobs have been lost since September 2023 when the $20 per hour minimum wage law, AB 1228, was signed into law,” the Globe reported in June.

A study by the National Bureau of Economic Research in Cambridge Massachusetts found California’s non-minimum-wage-intensive employment was on a slower growth trend than the rest of the United States prior to the implementation of its fast food minimum wage. The study also says “it is possible that AB 1228 has led full-service restaurants to have more difficulty attracting workers, or that those employers anticipate future minimum wage increases in their sector as well.”

The study concluded, “We document that AB 1228 increased wages substantially, with a roughly 8 percent increase in California’s fast food sector relative to the fast food sector elsewhere in the country.”

That’s really all anyone needs to know about California’s affordability problem. It’s indefensible statewide, and nationally.

And remember, if Gov. Newsom really believed the $20 per hour fast food minimum wage was going to help affordability in California, he would not have exempted his billionaire buddy who owns more than two dozen Panera Bread locations in California from the new $20 minimum wage law.