California Governor Gavin Newsom’s economic policies have been driving businesses out of the state, a trend highlighted by the recent comments of celebrity chef Andrew Gruel. Gruel. The chef, who is known for appearing as a Food Network judge expressed his frustrations with California’s business environment during an appearance on “Varney & Co.”
Gruel announced that while he will maintain his current restaurant in California, he plans to expand his business elsewhere. “I will not open another business in California until they actually fix things on a go-forward basis,” he declared boldly. Gruel attributed the struggles faced by the restaurant industry to numerous California policies, with crime being one of the most significant issues.
“Allowing all of these crimes has really ripped apart the social fabric that we know of as the foundation of businesses. And then businesses have had to suffer because of all the crime in their surrounding communities. Business goes down. The regulations have piled up,” Gruel explained. He criticized the regulatory environment, suggesting that bureaucrats, often working remotely, were creating unnecessary regulations for restaurants and retail businesses.
Gruel also noted how terrible the effects of California’s tax policies on the industry. “You can’t tax your way out of this, but for some reason, the governments continue to think that they can. And the businesses and the restaurants are the ones that are ultimately paying through that black hole, which there’s never an end [to],” he argued.
One of the most contentious policies is the state’s recent minimum wage hike. On April 1, California increased the minimum wage for certain fast-food restaurants from $16 to $20, following the passage of Assembly Bill (AB) 1228, signed into law by Governor Newsom in September. The Governor claimed that the state was moving “one step closer to fairer wages, safer and healthier working conditions, and better training by giving hardworking fast-food workers a stronger voice and seat at the table.”
However, the policy has had immediate repercussions. The Mexican restaurant chain Rubio’s Coastal Grill announced the closure of 48 locations in California, attributing the decision to the rising cost of doing business in the state. The closures included 13 locations in the San Diego area, 24 in the Los Angeles area, and 11 in northern California. Rubio’s will continue to operate 86 restaurants in California, Arizona, and Nevada.
Gruel broke down the financial impact of the new minimum wage rule, estimating that it would cost a restaurant like Rubio’s Coastal Grill about $300,000 a year. “If they were paying their workers $17 an hour, and now they’re up to $20. At 30 workers a week, 40 hours a week, that’s only $1,200 extra dollars times three, $3,600. Well, the payroll taxes on that alone will make it at least $5,000 to $6000 a week. 52 weeks over. That’s $300,000 a year,” he concluded.
