close up of a person's hands holding a burger

Navigating the Impact of California’s Fast Food Minimum Wage Hike

Could a $20 minimum wage in California’s fast-food industry be a recipe for economic upheaval or a much-needed financial boost for workers? Join us as we serve up a feast of perspectives with Dr. Brian Simpson and Dr. Rickard Briggs, dissecting the seismic impacts of wage increases on employees, businesses, and the very fabric of our society. Our robust conversation traverses the contentious terrain of higher earnings versus the stark realities of job losses and an accelerated shift toward automation and AI.

As the aroma of surging gas prices and wage hikes fill the air, witness small businesses struggling to stay afloat. This episode shares stories of closures and survival strategies, including those of establishments like Foster’s Freeze. These stories frame a broader debate on government’s role in wage regulation, stirring a pot of complex legislative and philosophical ingredients as we simmer closer to election year influences and policy decisions.

Finally, we plate up a philosophical and political discourse, garnished with the diverse perspectives of our distinguished guests. We dissect the moral conundrums and political ramifications of minimum wage laws, savoring the flavors of liberal and conservative viewpoints. As we prepare for the 2024 election season, this episode invites listeners to digest how these state-level decisions could season federal policy and the overall economic landscape. Join us at the table for a discussion that promises to satisfy your appetite for insightful analysis on the future of minimum wage laws.

  • 0:00:11 – Impact of Raising Minimum Wage (46 Seconds)
  • 0:05:57 – Sector-Specific Minimum Wage Evolution (91 Seconds)
  • 0:14:40 – Impact of Wage Increases on Businesses (90 Seconds)
  • 0:19:54 – Impact of California Business Regulations (82 Seconds)
  • 0:24:52 – Impact of Minimum Wage Increase (76 Seconds)
  • 0:29:00 – Debate on Minimum Wage Increase (91 Seconds)
  • 0:36:28 – Solutions for Advocacy and Business Success (57 Seconds)
  • 0:44:43 – Business Challenges in California (156 Seconds)

0:00:01 – Announcer

You are listening to the National University Podcast.

0:00:10 – Kimberly King

Hello, I’m Kimberly King. Welcome to the National University Podcast, where we offer a holistic approach to student support, well-being and success- the whole human education. We put passion into practice by offering accessible, achievable higher education to lifelong learners. Today we are discussing raising the minimum wage and that impact, what that is going to mean and, according to an article this is put out by the Congressional Budget Office, in general, increasing the federal minimum wage would raise the earnings and family income of most low-wage workers and thus lift some families out of poverty, but doing so would cause other low-wage workers to become jobless and their family income would fail. On today’s episode, we’re talking about the impact of raising the minimum wage, and joining us is Dr. Brian Simpson.

Brian is chair of the Department of Accounting, finance and Economics at National University, and his research focuses on monetary and banking theory in the business cycle, the philosophical foundation of economic ideas, and creating constitutional protections of individual rights and freedom. He has authored a book called A Declaration of Constitution for a Free Society, which modifies the Declaration of Independence and the US Constitution to make them fully consistent with the protection of individual rights. Also joining us is Dr. Rickard Briggs, and Dr. Briggs is a committed and well-accomplished global entrepreneur and academic with over 30 years of experience in business and academia. He has founded, launched and developed seven international businesses related to asset management, healthcare, business process management, insurance and consulting, as well as developed international partnerships with companies in North America, Asia, Australia, Africa and the Middle East, and we welcome both of you to the podcast. Wow, so impressive. How are you both doing?

0:02:16 – Doctor Brian Simpson

I’m doing well. Thank you, Kim.

0:02:19 – Kimberly King

Great. Well, I’m really excited. I think this is going to be a very relevant topic we’re discussing today. Why don’t you, before we start, fill in our audience a little bit on your mission and your work before we get to today’s show topic?

0:02:31 – Doctor Brian Simpson

Okay, well, I can go first. Yeah, as an economist and, like Kimberly mentioned, I’m the chair for the Department of Finance, economics and Marketing and Accounting at National University, so I enjoy talking about economics and discussing economics and teaching economics, debating about economics so that’s the focus that I have and I bring that to National University. I have a passion about teaching it and discussing it with students and other faculty. So that’s really what I want to do. I just want to provide the best learning experience possible for students regarding economics.

0:03:16 – Kimberly King

That’s and that was Brian Simpson. And now, what about you, Dr. Rickard Briggs?

0:03:22 – Doctor Rickard Briggs

Thank you for the wonderful introduction. I mean, just listening to it I’m like, oh, what a nice guy. I’m just teasing, no, really. I spent my time doing my own businesses, but now I work with National and my area is I teach, I’m a professor, but I’m also in charge of the Center for Business Management and Entrepreneurialism. So now it’s sort of I flipped script here. I did my own thing, I’ve developed and started businesses. Now I assist others in accomplishing their goals, either identifying opportunities, building their startup or continuing on and growing their existing business, which I find very fulfilling being able to provide the context that I’ve experienced globally to individuals who haven’t been able to acclimate themselves to a global or an international market yet.

0:04:13 – Kimberly King

Well, both again you bring such expertise both of you to this conversation and again it’s such a relevant topic and, of course, with your experience, your background, you’re both the perfect people to have on today. So we’re really talking about the impact of raising the minimum wage and so, Dr. Simpson, I’m going to start with you. What is the California fast food minimum wage these days?

0:04:39 – Doctor Brian Simpson

Yeah well, the fast food minimum wage law is a law that requires fast food restaurants that earn more than 50% of their gross income from selling food or beverage items for immediate consumption.

If they fit into that category, then they’re required to pay their employees at least $20 per hour. Now the California minimum wage was raised to $16 an hour across the board on January 1st 2024. So it’s a 25% increase for fast food workers that fall into that category, and this applies to restaurants that are a part of a chain of at least 60 restaurants nationwide, and there are a number of qualifications with regard to the law wide. And there are a number of qualifications with regard to the law. For instance, restaurants that also operate as bakeries and produce and sell bread as a standalone item are exempt. Fast food restaurants and grocery stores might be exempt from the law as well if they meet certain requirements, and there are a number of other qualifications as well. But the basic idea is if you are a fast food restaurant that has a part of a chain of at least 60 across the nation, then you have to pay your workers at least $20 an hour, and that started April 1st.

0:05:57 – Kimberly King

Wow, and I remember when that came about. I’m in Southern California, so I just remember when I first started working. I think that the number $3.50 stands out in my mind as a minimum wage back in the day. It wasn’t fast food, but it’s just insane. And I think what must the rest of the country be thinking, because this is a California item? Is that right? And I’m going to ask you, Dr. Briggs, what are your thoughts on that?

0:06:22 – Doctor Rickard Briggs

That’s an interesting question and I think from a I’m going to take a more philosophical standpoint and to Brian’s points. From a legal perspective, he’s absolutely right and from my perspective, from a philosophical perspective, this sector specific minimum wage is nothing new. As a matter of fact, it was first introduced back in the early 1900s in Massachusetts when they were doing specific wage variances for women and for minors. So we’ve seen the evolution of a changing dynamic in how monies are allocated to individuals who are in positions where their economic disparity is significantly different than the rest of the community. So that’s where we talk about sector specific, and in California they were specifically looking at these establishments within the fast food region, but other elements have included health care as well as some construction work and manual labor. So it’s something that we’ve seen evolve over the course of the last century.

Now, when we talk about the increase and I see a lot of arguments for and against both of the increase, the $20, as Brian mentioned earlier, is a 25% increase over the current rate, which is 16. But the federal minimum wage is still only $7.25, which is extremely problematic. And if we just look at it from a comparative analysis, if we look at the cost of living in the majority of the country, in comparison to the East and the West Coast, which have the predominant sector-specific wage variances, what you’ll find is that that variance isn’t that far off of what the economic differentials are between living in those regions.

For example, I did an analysis between Wyoming, which is, you know, center of the country, in comparison to California, and what you find is that the variance between prices is three times as much. For example, it’s a dollar for a cup of coffee in Wyoming. In Cheyenne, the capital, it’s three bucks, in San Francisco. It’s $700 for an apartment, a one bedroom apartment in Cheyenne. It’s close to 2000 in San Francisco. Now, if you also take a look at- so it’s three times the cost. And it’s not just sector specific.

People look at that $20 minimum wage and they say to themselves oh, that’s so much more in comparison. But not really. When we look at salaried employees too, a company like Merrill Lynch will spend $150,000, $175,000 for an accountant in San Francisco. Conversely, they’ll pay $50,000 in Wyoming for the same position. That cost of living is mitigated over a number of factors, whether it is food, transportation, housing and such. So again going back to the federal minimum wage, if the federal minimum wage is covering the majority of the country, which don’t get me started on the lack of increase there, but nonetheless it’s $7.25 and you’re still looking at $20 in California. If California is three times the cost of living, $20 is still under $21.50, which is three times $7.25. [Laughs] That was a mouthful.

0:09:36 – Kimberly King

Yeah, but I mean you really did show the difference there the federal amount and then versus what’s going on here in California and I appreciate. Thank you for speaking about the legalese on that and I mean I guess I don’t think it’s a good job-

0:09:51 – Doctor Brian Simpson

I have a little different perspective than Rick said, but yeah, go ahead. But I’d like to discuss that different perspective.

0:09:56 – Kimberly King

Oh yeah, go ahead, go ahead. Please.

0:09:59 – Doctor Brian Simpson

Yeah, I mean because one reason I would say the cost of living is so high in California is because things like the minimum wage and significant regulation with regard to the production of gasoline or gas taxes and cap and trade fees on gasoline due to environmental regulation at $1.30 per gallon of gas. I just paid $5.20 per gallon. I live in Southern California as well and it’s crazy. Because of the restrictions on the production of gasoline, electricity is extremely expensive in California. We’re dismantling dams, we’re shutting down nuclear power plants early and promoting, through the government, expensive so-called renewable energies with wind and solar, which are very unreliable, very expensive and depend on fossil fuels to back them up because they are so unreliable.

So and the minimum wage laws the really outrageous minimum wage laws in California and this fast food law is just a part of that they’re just making life much more expensive in California. They’re making it hard to be a low income person in California. Minimum wages in general cause unemployment because they make it harder to hire workers and that means businesses can’t hire as many workers. Businesses, especially small and large businesses. They don’t have a bottomless pit of money to hire workers, so they’re going to end up having to lay off workers Businesses, especially small and large businesses. They don’t have a bottomless pit of money to hire workers, so they’re going to end up having to lay off workers, or what they also do.

In these laws we’ve seen this effect already. They shorten the hours of those who do retain their jobs. So even those who do retain their jobs might end up making less money, and the research does show that that’s quite often the case. And of course businesses will raise prices. So that means more higher prices for everybody who’s purchasing those products and businesses shut down. There’s at least one example of a business Foster’s Freeze which is a fast food restaurant. That business one of those franchises shut down on April 1st, the day it opened. Pizza Hut in California laid off all their delivery workers even before April 1st, anticipating the expenses that they would have to incur. And I’ve heard of businesses now investing in other states, border states like Nevada, instead of California. One business owner of a number of fast food franchises said there’s too much regulation in California. I’m not investing in California anymore, I’m investing in Nevada.

So the main effect here of minimum wage laws is they cause unemployment, but overall they lower the standard of living, because they raise costs. They lower the productive capability overall in the economy and for most people that occurs immediately. Either the business owners, the laid-off workers whose income goes to zero basically, or the people who have to pay higher prices. Their standard of living is lower immediately higher wages and don’t end up earning less because their hours are reduced even more. Over the long term they’ll have a lower standard of living because it undermines the rate of economic progress.

Whenever you increase costs to businesses, you lower their productive capability and economic progress is compounding like interest on your savings account. Interest doesn’t just grow linearly on your savings account, it grows exponentially with compounding, and the same is true with economic progress. And when you undermine their rate of economic progress you cause everybody’s standard of living to be lower in the long run. So that’s the basic economic effect of minimum wage. And these are particularly harmful increases because it’s a 25% boost at least in that particular sector of the economy.

0:13:49 – Kimberly King

Boy and you talked about the price of gas here. I just saw it for almost $7 a gallon just over the weekend.

0:13:58 – Doctor Brian Simpson

Yeah, unfortunately $5.20 isn’t the high watermark in California.

0:14:04 – Kimberly King

No, and I think you know I agree with everything that you’re saying about how you know this is just. It’s bad for business. I mean when they see California going through this. But also think about the mom and pop. You know companies Like you’re talking about Foster Freeze and I don’t. You know that’s been around forever. It’s really sad to see these companies starting to close. And it’s really sad to see these companies starting to close and then some kids will say, oh well, they’re making $20 an hour at the fast food, so why should I work for you? So I mean it’s just bad for small business too, all around.

0:14:36 – Doctor Brian Simpson

Right, right.

0:14:40 – Kimberly King

So yeah, Dr. –

0:14:41 – Doctor Rickard Briggs

Let me add on to Brian’s point there, which I think, from an economic standpoint, is brilliant, and the trickle-down theory doesn’t work as well, does it? But one of the other items that I’ve seen from a negative perspective is that employers, once they’re subjected to a higher wage rate, start looking for alternatives, and that includes downsizing. And one of the things that I wanted to add on was this is the part of the automation process, and even AI is incorporated into this as a factor. Now, smaller businesses that aren’t doing those manual services are now able to incorporate this type of technology and the push towards moving to that.

Arguably, just from a business perspective, if someone suddenly told me my payroll has to go up by 25%, I’m going to start- that’s a kick in the butt- and I’m going to start looking for alternatives in order to keep my costs where they were a week ago, and I just use that time frame just to establish, you know, one day it’s literally an overnight change for a lot of businesses, especially those smaller franchises. Now, the larger franchises, arguably, are able to mitigate their costs, except for those independently owned and operated opportunities, but they know, and the costs of doing business within that specific region are pretty much standard, except for this sudden kick. I mean, if suddenly my mortgage went up 25 percent, that’s going to have an adverse effect on my business practice.

0:16:09 – Kimberly King

Absolutely. Go ahead.

0:16:10 – Doctor Brian Simpson

Just to add to what Rickard is saying, yeah, many fast food restaurants have talked about using automated kiosks and that’s another way that these would generate more unemployment. Because you don’t need as many workers, you won’t be ordering so much from a person at a checkout stand, you’ll be ordering at a computer more so because the computers, the kiosks, they become less expensive relative to these very expensive. These are low skill positions, really, and that’s how people can gain entry into the market, start gaining skills and work their way up to the wage and skill ladder, and it’s going to be harder for many of them to get those jobs now.

0:16:48 – Kimberly King

You know what, and again, we just saw that over the weekend too, whether they’re shutting down these businesses early or they’re not open on the weekends. So you know things that we’ve been used to, no matter where we are, California or wherever in the States. But and then again all of the self-checkouts where and I say this a lot I feel bad for our senior citizens, you know those that aren’t, you know, still trying to get used to just the technology. But now what, if you know it- Just I feel bad because I really feel like there’s a struggle and it’s like we should all just be funneled into-

You know AI, good and bad, but when you’re talking about wages, when you’re talking about the money that you know I guess we’re saving in one area, but really I don’t know. So I guess overall and that was kind of just my own opinion because I do see them struggling there but and that’s just like I said one part there, and that’s just like I said one part of it, that’s not the financial part of it what do you think the future is? What does it look like in both of your eyes? For where we’re going here? I know it’s also an election year, not to talk politics, but from where we are to what it looks like moving forward.

0:18:02 – Doctor Rickard Briggs

Before we get to that, Brian raised a point that I would like to add in too, because he negated one of my selling points in his conversation. [Laughter.] I was thinking from an economic, from my perspective. If you start paying your employees more well, arguably that money would then be put back into the economy, thereby increasing the general pool. However, Brian made a valid point. If you lay off the people, they’re not making $16 anymore, now they’re making zero. It’s like huh, but yeah, that makes good sense.

0:18:45 – Doctor Brian Simpson

And there is an interesting point with regard to that idea that if you pay workers more, that that somehow creates more spending in the economy or stimulates the economy. That in fact is not true, because one has to look at the effects on the business. For every dollar extra a business pays in to its workers, and therefore the workers, as long as they don’t get laid off or their hours shortened exorbitantly, they might have a dollar more to spend, but that means the business has a dollar less to spend on other inputs or to hire other people to provide other services. So in fact increasing the minimum wage doesn’t change the overall spending in the economy at all. It might increase the ability to spend for some workers, but it decreases the ability of businesses to spend and of course the laid off workers too. They can’t spend much at all. So overall its effect on spending is neutral in the economy. So it doesn’t stimulate the economy. It increases the spending in some categories of people, decreases it for some other categories like businesses.

0:19:54 – Kimberly King

And on that, point oh, go ahead.

0:19:55 – Doctor Rickard Briggs

Oh, I was going to say this is a wonderful, wonderful example. I’m going to throw this out there too, because we basically all of us have our silos in which we read our information and we gather our news and we gather our news, and so, of course, from the information that I get through from business journals and from other colleagues and so forth, is these positive aspects for it. But then when you talk to an economist, you’re like, huh, yeah, that makes more sense. Thank you, Brian.

0:20:25 – Doctor Brian Simpson

You have to look at all the effects on all groups of people, not just one group of people. One thing, Kimberly, you mentioned, though, was regarding what the future might look like with regard to- I’m specifically talking about California- but one thing these laws, or the passage of these laws, could do is embolden the California government and politicians in the California government and the local governments within California and, unfortunately, embolden them to pass additional laws that really violate the rights of business owners to pay artificially high wages, and there have been some proposals for more onerous laws even in California and at the state level. In terms of the California, legislature is proposing a more onerous plastic bag ban. They ban single use plastic bags already. They’re talking about banning multi-use plastic bags. You can pay 10 cents and get the multi-use bags, and actually, the ban the initial ban that they imposed a few years ago has actually led to an increase in the amount of plastic in the sort of garbage dumps and things like that, but they’re talking about a more onerous ban, and San Francisco has proposed a law that would make it illegal for grocery stores to close down if they don’t meet certain conditions, such as giving a six-month notice and helping people in the area find new sources of food after they close, and people could actually sue if the stores don’t meet all the requirements.

Now I don’t know if these types of laws have sort of been people, politicians have been emboldened to create them, but they will have, you know, much more strong effects on the cost of living, make it much higher. And actually, in the case of San Francisco, you think, oh, that’s good that they’ll prevent grocery stores from shutting down so people have access to more food. But what is a grocery store owner going to do if they were thinking about opening a store in San Francisco and, you know, if it doesn’t work out, now all of a sudden they can’t shut down. They’re just going to say, well, we’re just not going to open a store, a grocery store, in San Francisco, so it’ll actually lead to fewer grocery stores and less access to food in the San Francisco area, so that, unfortunately, it’s more of the same. I think in California we’re going to have a much higher cost of living for everybody, for the wealthy and low-income workers alike.

0:23:02 – Kimberly King

I agree, is what I was saying. I’m thinking are we now we’re paying $15 for a hamburger? You know, and I mean that sounds it. Just it’s going to be insane. I don’t know where the cap is off of here, and then just to hear about where the? You know where we are going San Francisco, I, you’re following it, you see it, where they’re going to be shutting down. They can’t afford that. So I just I wonder what is the end game?

0:23:31 – Doctor Rickard Briggs

I’ll add on to that.

Going to the future, I think it’s relatively simplistic.

If you look at the data for the course of the last century, they’re not going backwards, it’s going up.

And there’s a number of different plans that have been implemented by different states on how to mitigate those types of wage increases. In New York, in DC, for example, and I’ve seen this happen in a number of different areas but DC pays their government contractors more in that region than they do in the suburbs. That’s just based on the cost of living variance suburbs that’s just based on the cost of living variance. Seattle, for example, pioneered higher minimum wage and have been aggressively increasing those over the course of the years. Oregon is one of my favorites and I would argue that this is not a bad plan that they’re trying to differentiate based on urban and rural areas, so that state-specific, where we have different variances based on urban and rural areas, instead of a blanket wage increase across the state, which I would argue that tiered network is a much more practical approach and also it allows individuals to kind of get their feet wet as they prepare for the inevitable within their region.

0:24:52 – Kimberly King

Wow, I could talk to you both about this all day. We have to take a quick break. Don’t go away. We’ll have more in just a moment. We’ll be right back. And now back to our interview with Dr. Rickard Briggs and Dr. Brian Simpson and we’re talking about the impact of raising the minimum wage, and this has been a very interesting, maybe a little heated conversation. There’s a lot of thoughts going on here and, Dr. Simpson, I’m going to start with you about the political ramifications. What could the new minimum wage have? These ramifications coming up in California specifically.

0:25:30 – Doctor Brian Simpson

Yeah, I mean in general. In terms of elections, it’s hard to tell. I mean, a lot of voters in California want the politicians in office who vote for these kinds of laws, so it actually could improve their chances of winning elections. But as people start seeing, you know, the cost of their food at fast food, restaurants and costs in general going up prices they have to pay going up it might create some sort of a backlash politically in terms of at the election ballot, so some politicians might find it harder to become elected.

I mean in general, I think, though, if what can be done, if people want to help low income individuals, I think in California, really, it’s it’s the we need to eliminate laws that make life much more expensive. In California, like, like I mentioned previously, we have a lot of regulations and taxes on gasoline and producing electricity and in many other ways, and, in fact, one study has found that the cost of living in a typical California city is about 40% higher than the cost of living in the average city nationwide, and so that’s a result of all these kinds of regulations that exist. So I think that would be a better option than just trying to force employers to pay higher wages. If you want to help low-income individuals and everybody in general, I think you need to start pushing the state legislature and local governments as well, to abolish some of these regulations, to reduce costs to businesses and ultimately, prices will come down. They’ll be more productive as a result.

0:27:19 – Kimberly King

So I was just going to comment before I get to you, Dr. Rickard, and that is I mean we’re literally in a one party state. Isn’t it an uphill battle here in California when we want to try to push to make the numbers start going back down? 40% higher to live here, and I know we have beautiful weather, but come on.

0:27:39 – Doctor Brian Simpson

Yeah, yeah, but it doesn’t have to be that much higher. I mean, to some extent, I think even without all the added regulations, it would be more expensive because, yeah, especially if you want to live near the coast, everybody wants to live near the coast and there’s only so much space available, so that would tend to still drive up housing prices there. But, yeah, I think it is an uphill battle because, like I mentioned, the one party does have a super majority in the state assembly and the state senate and they control all the statewide positions in the California government and what they want is more regulation, and so I expect to see this continue and it’s going to be difficult to change things, I think, going forward at least in the near term.

0:28:29 – Kimberly King

Which, again, as you read, you know the mass exodus out of California, but it feels like as many people that are leaving they’re coming in too. So what are your thoughts about the political ramifications? Or what did anything come to mind for you, Dr. Briggs? Or what did anything come to mind for you, Dr. Briggs, yeah, yeah. Alright. He’s in Pennsylvania, by the way, and was telling us the price of your gas, yeah.

0:28:53 – Doctor Rickard Briggs

All right, buckle up.

0:28:56 – Kimberly King

Okay, here we are.

0:29:00 – Doctor Rickard Briggs

So again, this is more philosophical and Brian’s made some excellent points from an economical standpoint. The real issue, and it’s not just state specific, obviously California is an extremely liberal state and the argument which one of the arguments for an increased minimum wage falls under that social justice category, which is much more palatable to a liberal audience than it is to a conservative audience, they don’t understand. The majority of individuals don’t have the detailed knowledge of the economic fallout and the price variances on a national basis. What they see on a daily basis the majority of people are prices going up unilaterally on in every sector. The economy. Interest is going up, the gas is going up unilaterally in every sector. The gas is going up, the groceries are going up, the economy is, everything’s going up. So, using that as your foundational argument, you say well then, we’ve got to pay everyone accordingly and we’ve got to be fair about it. If we pay the lower sections more money, that’s good for us, that’s a feel good feeling. So there’s a humanistic approach to it. That’s outside the realm of reality from an economic standpoint and that’s what politicians sell social justice argument.

Now, and conversely, what I will say is that you will see these types of efforts made in more liberal states. I get that. I mean I’ve always been a liberal from social aspect and a conservative from an economic standpoint. Being a business owner, it just I mean, these are conversations that you have to have. But at the same time, I hear my, I hear my family, my friends, the silos that I that I work in, when they talk about these types of increases. They’re not talking economics, they’re talking how it affects them in comparison to what they’re seeing in their everyday lives. They don’t understand how this cause, the cause and effect chain. So they look at it from a more holistic standpoint.

I see it being a big political issue in the 2024 political spectrum. There’s no way around it. Whether or not you’re going to argue that there should be an increase, I actually I see these outlier states where we have these increased minimum wages going up over $15, $20 an hour. That’s going to put a lot of pressure on the political party that’s in office to increase the federal minimum wage. And once the federal minimum wage starts going up, then you’re going to start seeing even more states complying with the $20 minimum wage, and that’s my perspective, whether or not that’s supported economically, it’s probably not. From a philosophical standpoint and from a layperson’s perspective, that’s probably how they’re going to interpret the data.

0:32:01 – Kimberly King

Wow, and I love that you talked about that from that philosophical point of view, because you’re right, that is really how the politicians are banking on that for their vote. And meanwhile, I guess the more we pay and we’re comfortable paying that $15 for a hamburger then who’s to say that those changes are going to happen? We’re seeing that right now and, yes, we’re grumbling about it, but we’re still paying that, right?

0:32:26 – Doctor Brian Simpson

Yes, we’re rumbling about it, but we’re still paying that right. Yeah, I was going to bring something up from a little different moral and philosophical perspective, because there is a perspective from the egoist code of morality which says it’s a moral virtue to act in your rational self-interest, use your mind to think and create the values that your life requires so that you can survive and flourish. And based on that egoist perspective, the laws are immoral because they violate the rights and freedom of employers and business owners and workers who are laid off. They violate these rights by using compulsion and coercion to force employers to pay a certain wage and, in many cases, are forcing workers to be laid off because they might agree voluntarily to accept a lower wage just to keep their job.

From this perspective, business owners have a right to their property, including a right to the use of the money that they use to pay wages, wages that they think are appropriate. And the laws violate this right by using compulsion and coercion to prevent business owners from using their property as they see best. And the laws also violate the rights of employers and the laid off workers really to freely contract with each other and voluntarily agree on a wage as a part of that contract and the worker might see that as a better situation than. Oh, now my employer’s forced to pay a higher wage and some workers have been laid off as a result and they might be willing to accept something lower than $20 an hour to keep their job. So from that egoistic perspective, that egoist moral philosophy, the laws are immoral because it prevents people from acting in their rational self-interest to further their lives and well-being.

And that’s not a perspective that many politicians embrace, but I think if more politicians embrace that perspective, we’d have a far more robust and much more flourishing economy, not only in California but, I think, across the country.

0:34:36 – Kimberly King

I totally agree with you. I think that just we need to go behind the scenes and figure that out and really talk about that from the moral perspective. I think that’s really interesting. What about you, Dr. Briggs, do you have anything about that?

0:34:45 – Doctor Rickard Briggs

I concur. The only addition that I’ll have, and I just wanna reiterate, that this is sector specific and Brian did mention earlier there are classifications that affect the size of the business and that are mandated, and he’s absolutely right. You have individuals that are going to be and even from a business perspective, I would lay off individuals and figure out a better way to mitigate my costs having a larger business.

However, he’s right. People who are laid off will end up going to the in the same sector that aren’t affected or employers that aren’t mandated to that minimum wage and work for less money. And just from personal experience, there are pools of individuals that will take who have been traditionally tapped in order to fill those lower positions, traditionally tapped in order to fill those lower positions. Senior citizens and the young are prime examples of individuals, and I think it’s been mentioned in the past too that these types of jobs were traditionally the stepping stones a younger generation, and now you’re seeing the older generation also coming back into the workplace filling these positions that aren’t getting them and they’re not going to be hired by the larger organizations.

They’re going to fill those smaller positions, then forcing those individuals that were laid off that are active young workers in that $20 wage set, trying to get jobs into these smaller mom and pop businesses where they’re actually filling it with individuals who are going to take a lower income wage than those individuals who you were accustomed to getting that $16 or $20.

0:36:28 – Kimberly King

You know, there’s two things I want to ask you about, and the first one is about what are the next solutions? Besides calling our congressmen and our senators about these issues, what else can we do? And then I do want to ask you another question about what we’re telling our business majors these days, especially if they want to go into small businesses, and especially in California. What advice do you have? So back to the first one what do you see about this congressman, and what else can we do in order to rattle the cage and sound the alarms about these salaries?

0:37:05 – Doctor Brian Simpson

I mean, I can take that first. I mean, yeah, besides, you know, calling your congressperson or voting one way or another at the ballot box, you can advocate for the right ideas, ultimately. Argue for ideas that that protect individual rights. That you know, I think we need to stop, at all levels of government, but especially in states like California, stop basically trying to use force to impose our will on others through the government. What it, it really what was known as initiating physical force or violating individual rights. You know, using compulsion and coercion to basically get our way. We need to stop doing that. So we need to advocate for the protection of individual rights. I think the proper function of government is to protect rights, not to violate rights, and if we do that, we’d have a much more flourishing economy, and I think here there’s a link between economics and morality.

I talked about how, from the egoistic perspective, these laws are immoral, and we see that whenever laws are passed. This happens in general. When you pass laws that tend to violate rights, it tends to harm things economically. In this case, it makes it harder, ultimately, even for low income individuals to have a higher standard of living, because it reduces the rate of economic progress, or they get laid off, or they have to pay for higher prices for goods or, you know, it’s harder for them because, we have to remember, these are low-skilled, entry-level positions that minimum wage laws apply to. And if we make it so expensive to hire these workers, these workers generally probably don’t have. They’re looking at coming into the first job. They might not have much experience, so the employer’s taking a chance with them. They have to show that they can be responsible, show up to work on time, learn things about how to be a good worker and, in general, be a good worker.

And studies show that even with lower minimum wages, like the federal minimum wage at $7.25, within a year, about 65% of workers who start at these low minimum wages are quickly above the minimum wage at $7.25, within a year, about 65% of workers who started these low minimum wages are quickly above the minimum wage. They start gaining skills and rising above that minimum wage because they can show the employer that yeah, I can show up to work on time, I’m a responsible person. And so what we end up doing with these minimum wage laws that cause unemployment? And so what we end up doing with these minimum wage laws that cause unemployment. We basically are forcing people to live for a longer period of time in poverty because they can’t get that first job, to start gaining those skills and moving up the wage and skill ladder. So we need to advocate laws that protect rights, and when we pass laws that violate rights, like this kind of law, it ends up harming things economically, and that’s generally true in economics. You have that link between morality and economics. So that’s how I would respond.

0:40:07 – Kimberly King

And just really quickly. I love the thought about that, that whole moral part of it, but also just gaining skills when you start off. I mean my kids went to a private school. They did not have a Porsche right out the gate, but there were those in the parking lot and I always thought, really, why don’t you work toward wanting that expensive car rather than have mom and dad just buy that for you? I mean, where are those skills for gaining? Almost like everybody on your team is going to get a trophy because you showed up, but I just give them something to work for right? Any thoughts there?

0:40:45 – Doctor Rickard Briggs

Well, I’ll add on to that conversation I think we’re talking about what can we do other than calling our congressmen. And, unfortunately and this has always been problematic for me, primarily because I live in a different bubble- we’re in a different bubble, especially in academia. We have exposure and understanding of a broad series of topics based on the research and the readings that we do. My argument is the same with politics, it’s the same with the economy, is that individuals who are getting their information, or disinformation, misinformation or not understanding the process of the scale of economy, which I even admitted earlier.

Brian’s an economist and my argument from a social perspective falls weak when you start looking at the numbers, as proffered by Brian, and that makes sense. So the using that as a prime example, that falls into the same argument that I make with politics too. It’s a trust, but verify, which is a universal platform, you have to- You have to understand what you’re talking about. A lot of information is just misinformation. One person says something and it’s articulated again and again, and again, and suddenly it becomes a fact when it indeed is not. So education and information, accurate information, is what I would argue needs to be added to calling your congressman. So if you’re calling your congressman jumping up and down, but you don’t know why you’re really calling just because you’re upset that it went up to $20 or it’s not gone up to $25, then if you don’t have the information to back that argument up, that’s where the problem lies.

0:42:35 – Kimberly King

And I agree with that too. I mean, I think you’re right- Trust but verify, but also be specific when you’re saying. You know what? I think I just have a fear of these small businesses. My father was an owner of a small business within the laundry department of you know, going into hotels and jails and industrial, and that has really been wiped out. But you know what? Again, I think I asked that in the very beginning. The future for kids or young adults that want to take over their parents’ businesses, especially in California. But it just it feels very daunting and it feels like we’re looking past that now.

0:43:15 – Doctor Rickard Briggs

You had also asked one of the questions from a business perspective. What would you tell business owners at this point in time? And I had and this is I’m going back 30 years now and the economy was very different. But, uh, as a startup I was in basically economic straits. I just didn’t have the revenue to hire the people that I needed to staff my organization.

So I had to get creative and I ended up offering and this is before flex schedules. I also had the opportunity of having a global company where I was able to have the office open 24-7. And I used that as a selling feature to employees. I was only able to offer a third of what other organizations in my district and my vertical were offering. So I tapped into new mothers, women who were staying at home, senior citizens, and I had the office open seven days a week.

So I had individuals coming in and working full weekends and allowing them to stay home. The father could stay home or the mother could stay home on the weekend and then they could switch off, and the one the spouse went to work on the full time and they took a job at 60% less than the market was paying in order to make that and that was, that was the creative. That’s how I got creative in staffing my organization and that was that was pretty, that was that was unique at the time. I think over the course of the next few years you’re going to find that become more the norm than a one-off.

0:44:51 – Kimberly King

Yeah, I remember when you talked about that and I thought, boy, that was you know, however many years ago and you were already so ahead of the game. So I guess my last thought is I hope that we can still stay ahead of the game, be creative but also really employ. You know, these business majors coming out of college and wanting to flourish, you know, and take over their mom and pop’s business or be a startup. You know, and I really just hope we’re not squelching dreams as we move forward in this policy.

0:45:24 – Doctor Brian Simpson

Right and and yeah, I think uh record for uh bringing that point up about advice to to business students and people wanting to open their business, because the advice I would give, especially in states like California, is to be very careful about opening a business in California. You know, it’s like that proposed law in San Francisco that will make it illegal, for if it actually passes that, it will make it illegal for grocery stores to shut down. I mean, you’d have to be very careful and you know not see any big downside in terms of profitability to opening up a grocery store there, because if your calculations are wrong and it doesn’t turn out to be profitable, you might not be able to shut down or it’d be much harder. And in California in general, because of all the regulations that exist, including this kind of minimum wage law in the fast food industry, it’s just very difficult to do business as a small business. But even as a large business it increases costs dramatically and that’s why you do see some large businesses moving out of California, moving their headquarters.

And I mentioned earlier that one fast food franchisee who has stated explicitly yeah, I’m investing in Nevada now, I’m opening stores there, I have fast food restaurants in California, but I’m not investing any more to expand, and he stated explicitly because California is just there’s just too much regulation and so you do have to be very careful. And that’s one effect you’ll see on the border states that maybe, and perhaps other states, that people will invest more in those areas instead of California.

0:47:09 – Kimberly King

Yeah, that is definitely what we’re seeing. Well, this has been an eye-opening conversation and great information, and I really appreciate both of your expertise. Thank you for joining us today. If you want information, you can visit National University’s website at And again, gentlemen, thank you so much for your time today.

0:47:30 – Doctor Rickard Briggs

Thank you, Kim, thank you.

0:47:35 – Kimberly King

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