The California minimum wage hike made the economy worse. Newsom can't fix that

The minimum wage hike is the latest example of why California's economy is starting to struggle — and U.S. Gov. Gavin Newsom shouldn't be trusted to fix it.


California was once a wonderland where dreams came true. From Disney and Hollywood to its lush landscape and powerful politics, it seemed a utopian image of diversity, forward-thinking ideas and economic health.

California's per capita income and GDP increased thanks to a growing agricultural industry, a growing technology sector and low unemployment rates. In 2022, the state was The world's fifth largest economyIt boasts a higher GDP than most developed countries.

Further Billionaires More people live in California than ever before, with data showing their numbers 66% growth 2019 to 2021.

As California slowly embraced more progressive policies, even right-wing America had to bow to its booming economy.

What went wrong with California's economy?

But California's booming economy is rooted in liberal policies. Things like tax hikes, strict regulations and policies are progressive but fail to produce positive results. According to Economist„The state faces three overlapping challenges: rising unemployment, growing fiscal strains and population exodus.”

The California Center for Jobs and the Economy found this out California's economy could literally collapse From the fifth best in the world. The state's GDP growth was 32nd in the country last year, due to declining revenue from rising unemployment, among other factors.

There are few indicators of where the state's economy is headed. High gas prices and housing prices are creating an affordability crisis. California is now Highest unemployment rate in the country. It is More than a million unemployed workers.

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How do California economic policies compare to Texas?

For comparison, let's see how Texas, a Republican-held state, stacks up against California. The Texas' economy is second only to California's Among American states And eighth in the world.

2021, even as California's economy hums Stanford University study A comparison of the economies of Texas and California points to stark differences between the red and blue regimes that predicted California's slow descent.

In California, state and local government revenues and expenditures were 60% higher than in Texas. California has the highest marginal personal income tax rate in the country, while Texas has no personal income tax (although property taxes are high in Texas).

„State and local governments in California and Texas spent $638 billion and $291 billion, respectively, in fiscal year 2019, or $16,105 and $10,024 per resident,” the report states.

California thinks a large taxpayer-subsidized government is the answer to their residents' problems; Texas didn't guess that.

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California's decision to raise the minimum wage made matters worse

The California Legislature added to the problems by passing a law raising the minimum wage.

From April 1, Fast food restaurant workers Pay at least $20 an hour. Sounds good, doesn't it? Makes the Slingin' Burgers at McDonald's a little more appealing, doesn't it? Not so fast.

If an employer needs to increase an hourly wage earner's take-home pay by several dollars, that money has to come from somewhere. Businesses must cut other salaries, raise prices to customers, or — in the worst case scenario — close.

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Restaurants are already starting to feel the effects.

Professionals To offset the increased cost to their bottom line, some business owners may opt for kiosks or other technological advancements to replace labor.

The new minimum wage law is not a boon for consumers. Several fast food chains in California have already been pointed out They will be forced to raise prices In the menu items.

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California's new minimum wage law will also affect small businesses.

said Robert Irwin, celebrity chef and host of „Restaurant: Impossible.” Fox News Digital, “We're going to lose about 20-plus percent of our small, mom-and-pop businesses because what California has actually done will help other states do the same. (It) has opened the gates for other states to raise that minimum wage.

Irwin is right: California has sometimes pioneered social, political and economic policies. This should be rejected and put to an end across the country.

Indeed, there is evidence that residents feel that life in their beloved Golden State is no longer sustainable. California residents They run in drovesMostly for states with no income tax like Florida and Texas.

Voters are likely to reject some of Newsom's liberal policies

A November ballot initiative could stem the tide a bit and begin to balance California's economy. The Taxpayer Protection and Government Accountability Act requiredVoter approval of new California taxes or tax increases So we can limit the upcoming tax increases at the state and local levels. This provision is designed to curb frequent tax hikes without oversight.

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Of course, Newsom doesn't support the initiative, which is why Californians should like it.

Putting progressivism aside for a moment, Newsom shows promise as the Democratic presidential nominee. He is charming and capable of leading a behemoth economy, and voters like him.

Behind the glamor, however, lies a leader who helped derail California — even a once-untouchable economy — by implementing progressive policies that hurt residents.

Newsom is a study of how important ideology and policy are—that prevailing socialist ideas can hurt or hurt even the most promising politicians. If he's serious, he needs to position himself toward the center and start listening when voters tell him they want oversight when it comes to state and local taxes.

Decades of progressive policies helped transform California into a socialist utopia. It will take some time for the economy to react to tax hikes, stricter regulations and policies that are progressive but fail to produce positive outcomes.

The minimum wage hike is just the latest example of why California's economy is starting to struggle, and America shouldn't trust Newsom to fix it. Because even California liberals can walk away from a good economy and into a heavily taxed and heavily regulated one that boasts the nation's highest unemployment rate and is increasingly unaffordable.

Nicole Russell is an opinion columnist for USA TODAY. She lives in Texas with her four children.

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