Gavin Newsom folds after getting the bill for his minimum wage healthcare law

Chalk this one up to another case where a leftist got mugged by reality.

Like so many other actions by radical politicians, this latest one is neither effective nor financially sound.

Now Gavin Newsom has folded after he got the bill for his minimum wage healthcare law.

When it comes to chasing businesses out of the Golden State, California Governor Gavin Newsom (D) has plenty of experience.

That’s because he’s a committed left-wing ideologue and has a tendency to double down on failed policies even amid mounting evidence that they simply don’t work.

Under Gavin Newsom’s brand of “leadership,” the state of California has enacted a $20 minimum wage law on private businesses.

Minimum wage hike promised more money but delivered more problems

According to the Hoover Institution, after Newsom signed California Assembly Bill 1287 into law, including a $20 minimum wage for fast-food workers, California fast-food restaurants cut about 9,500 jobs through April.

That would be bad enough, but more job losses have occurred since then.

Pizza Hut and Round Table have fired 1,300 delivery drivers.

Rather than simply taking the hit on increased wage costs for their employees, businesses have simply passed those costs onto the consumers.

Since the law took effect at the beginning of April, Wendy’s has increased prices by 8 percent, Chipotle’s prices have increased by 7.5 percent, and Starbucks prices are up by 7 percent.

It’s gotten so bad that franchisees of large national restaurant chains are worried about their ability to run their businesses successfully.

Scott Rodrick, a Northern California McDonald’s franchisee, lamented, “I can’t charge $20 for Happy Meals.”

The minimum wage law on private businesses has proved to be disastrous, but it’s nonetheless still on the books.

Ruining businesses is one thing but the state is another

While Newsom might as well be shrugging his shoulders at the prospect of businesses being ruined by ill-conceived policy, he’s not going to sit back and let the state be burdened by a similar law.

Newsom had previously signed a law into effect that mandated a $25 minimum wage for healthcare workers.

But, now it seems he’s had a change of heart.

Because the state of California covers much of the state’s healthcare expenses, for Newsom this suddenly seems like a bad idea.

According to the Wall Street Journal, California’s budget deficit increased to $45 billion. 

Newsom now says that the new healthcare minimum wage would cost the state $4 billion more a year because of higher Medicaid costs and compensation for workers at state-owned facilities.

Given this reality, he is now seeking to tie health worker minimum-wage increases to the state’s general fund revenue and to exempt state facilities.

The Journal says that this is problematic because private insurers will have to pay the wage mandate and will eventually pass those costs onto patients.

The only good way to avoid this would be to repeal the $25 minimum wage.

Many Californians are now making less money even with the higher minimum wage because of a drop in hours worked.

Newsom has no qualms about private businesses feeling the financial pinch but when the state is on the hook, somehow that’s intolerable.

In the end, this is just one more example of how California, under Newsom and other leftist leaders, is completely dysfunctional, and new leadership is sorely needed.

Stay tuned to Blue State Blues for any updates to this ongoing story.

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