I remember my first fish taco from Rubio’s Baja Grill. It was a game changer. Crispy fish, combined with a creamy sauce, cabbage, cilantro, onion, and lime in a fresh corn tortilla. It was as close to a revelatory food experience as you could imagine having at a fast-food restaurant. But last week, Rubio’s announced it was closing 48 of its 115 California restaurants because of California’s high operating costs. I estimate that these closures destroyed about 1,250 jobs, since the average Rubio’s restaurant employs about 26 workers.
What happened? California fast-food restaurant operating costs rose substantially on April 1, when the state’s new fast-food law took effect. The law (Assembly Bill 1288) increased the minimum wage for fast-food workers in the state to $20 per hour. This is 25% higher than the $16-per-hour minimum wage that applies to all other California workers. Rubio’s job losses followed as many as 10,000 others in the industry that occurred even before the law took effect.
California’s new law puts fast-food restaurants at a severe disadvantage compared with businesses in every other industry in the state. There is no rationale for levying a more severe regulation on a single industry. And state lawmakers couldn’t have picked a worse industry to single out. Around 60% of........