Conservative economist Thomas Sowell will turn 94 on June 30, but his wit and wisdom remain as timely and necessary as ever.
Take the case of a McDonald’s restaurant that’s been in an iconic San Francisco location for over 30 years. Then take one of Sowell’s most famous — and accurate — quotes:
“Unfortunately, the real minimum wage is always zero, regardless of the laws, and that is the wage that many workers receive in the wake of the creation or escalation of a government-mandated minimum wage, because they lose their jobs or fail to find jobs when they enter the labor force,” Sowell wrote in his 2000 book “Basic Economics: A Citizen’s Guide to the Economy.”
“Making it illegal to pay less than a given amount does not make a worker’s productivity worth that amount — and, if it is not, that worker is unlikely to be employed.”
Well, guess what’s happening at the McD’s at Stonestown Galleria in San Francisco now that the state requires a $20 minimum wage for most fast-food workers?
According to San Francisco’s KGO-TV, the restaurant closed permanently on Sunday, in part because of the new wage laws in the state.
“It has been a pleasure for my entire team and I to serve the 19th Avenue and Ingleside neighborhoods for more than 30 years,” a letter posted outside the restaurant stated, KGO reported.
“We are thankful to have been part of your daily meal routine, either for an Egg McMuffin in the morning or a Happy Meal with the kids after an afternoon of shopping at Stonestown.”
Franchise owner Scott Rodrick said there were two reasons for the closure, one of them obvious.
Is a higher minimum wage bad?
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First, the less-obvious one: Rodrick said that the landlord at Stonestown wasn’t willing to negotiate a sustainable long-term lease at the San Francisco mall.
It’s unclear whether this is because of renovations being done at Stonestown; according to the mall’s website, the owners have “been working with the community for four years to create a vision to build a vibrant new neighborhood around the mall on what is now a vast expanse of parking lots. That vision will transform Stonestown from a retail center to a town center.”
However, things were already pretty expensive in that part of the world, with Rodrick saying “the property taxes and shared tenant mall fees were the highest paid for a single location for the company,” according to KGO.
And now, the part that won’t shock you: The $20 minimum wage is making it difficult to keep the location viable.
“This is a gut wrenching day for my family,” Rodrick told KGO, adding that the employees at the restaurant were offered other positions at nearby locations.
The Stonestown Galleria McDonald’s is closing today after more than 30 years in business.
The franchisee owner Scott Rodrick told me this was for 2 reasons:
He says the landlord was unwilling to negotiate a “sensible” rent & that property taxes and mall fees were the highest… pic.twitter.com/qHmTe3PsQy
— Dion Lim (@DionLimTV) June 23, 2024
No doubt, the loss of the restaurant is “gut-wrenching” for customers, too.
However, restaurant closures have been a not-uncommon sight in the Golden State since an April law aimed at increasing the minimum wage at fast-food restaurants to $20 kicked in.
Immediately after the law kicked in back in April, popular chain Mod Pizza abruptly closed five locations in the state. Another popular restaurant in Lemoore, California, shut down suddenly just days after the new law came into effect, leaving 20 suddenly jobless.
Even in Hollywood, an Arby’s location on Sunset Boulevard that had become a local landmark shut down last week due to the minimum wage increase:
When Arby’s Hollywood opened in January 1969 on Sunset Blvd., it had an unobstructed view of the Hollywood sign. That went away a few decades later and now, after 55 long years, the location has closed. pic.twitter.com/f5THNTo50f
— Richard Horgan (@hollywoodspin) June 16, 2024
And keep in mind, this wage has only been in place for a few months now. Most restaurants remain open, although diners are experiencing sticker shock; in April, a TikTok user went viral for a clip featuring a $25 40-piece Chicken McNugget meal.
While I hope nobody is consuming that many McNuggets alone, a quarter of a Benjamin for 40 McNuggets is beyond insane — and this didn’t even include a soda. (Although you did get two large fries with it.)
“You couldn’t even throw in, like, a medium Sprite in there? Holy crap,” the woman said in the video.
But remember: Eventually, that price, like the minimum wage, could drop to $0 — because the meal is no longer available and the location is closed. Wash, rinse, repeat. It’s almost like California can’t learn from its own mistakes — or from Thomas Sowell’s timeless wisdom.
