New California law championed Gov. Gavin Newsom, a Democrat, increased the fast food worker’s hourly wage from $16 an hour to $20. The law went into effect on April 1, 2020. Fast-food chains across the state felt the impact of the new law on their bottom lines very quickly. To offset the new state wage requirement, many have had to reduce hours and layoff employees.

The Cheng Family operates seven Wendy’s Restaurants in Southern California. They had to cut their staff by nearly half, reduce the hours of remaining employees, and raise prices by 8% to offset the wage increases.

Wendy’s was not the only company to be affected by the new law. Rubio’s California Grill reportedly closed dozens of its locations in the state. Jersey Mike’s had to reduce part-time employees. McDonald’s, In-N-Out and other chain restaurants have also been forced to increase menu prices. After 55 years, the iconic Arby’s restaurant in Hollywood was forced to close its doors. The new minimum wage, the inflation and increased food prices were too much for them to overcome. Many fast-food workers in California now earn $0 an hour instead of $20 and are forced to find new work in a market that is already tough. This was not the intended result of this new law.

Jot Condie is the president and CEO of California Restaurant Association. He told Associated Press that “any restaurant business with thin margins would be forced to cut expenses in other areas if labor costs jumped more than 25% overnight.”

California restaurant workers are not the only ones to experience the negative effects of a higher wage. Simone Barron, a presenter on PragerU’s “Minimum wage cost me my job” video, explains how she regretted her decision to support a higher minimum salary. Barron, who considered herself to be a “fairminded progressive,” cheered the Seattle City Council in 2015 when it raised the minimum hourly wage from $9.47 up to $15. The restaurant she worked at closed permanently as a result. Barron quickly secured an interview with another restaurant. However, the restaurant closed down before she had a chance to take it.

New York City’s higher minimum wage drove the industry into recession years ago. 75 percent of employers reduced employee hours, and 47 percent eliminated positions. Sacramento has, unfortunately, not learned from New York’s mistakes.

Many “fair-minded” progressives like Simone Barron might think that a higher wage for minimum wage workers is a good thing in general, but the reality is quite different. The negative effects of a higher minimum wage often outweigh the potential benefits.

It seems obvious: When business costs rise, such as paying higher wages, businesses must cover these expenses, usually by increasing prices to consumers. This is a basic economic principle that all young Americans should be taught in high school. Unfortunately, this is not the case. The American education system falls short, putting DEI (Diversity, Equity, and Inclusion), radical gender ideologies, doomsday narratives, revisionist histories, and anti-Americanism above practical life skills, financial knowledge, and fundamental subjects such as history, math, and Civics.

Many Americans are not familiar with the basics of economics. This is one of today’s most important, but misunderstood topics. PragerU is aware that the education system in America is failing Americans. It is dedicated to filling that void. PragerU launched its Economics 101, a series of free videos and educational materials that teaches basic economic principles to Americans in need of an education. This is for those who don’t want to read a 1000-page book or wade through a sea of misinformation online.

Sign up to receive daily emails with a 5-Minute Video on Economics from PragerU. Participants also receive a special edition PragerU Economics 201 e-book, as well as another e book from the Atlas Society.

Econ 101 videos cover a wide range of topics, including capitalism, socialism and the free market. They also discuss minimum wage, inflation and taxes. The presenters include David Bahnsen who is ranked as one of America’s top financial advisors by Barron’s and Forbes. Steve Forbes, chairman of Forbes Media and a best-selling writer, has been a Republican Party nominee twice and is a two-time president candidate. Stephen Moore an economist, former fellow of the Cato Institute, worked for FreedomWorks and The Washington Times.

We must find alternatives to the mainstream media and government to educate our citizens about economics. PragerU brings together the best economists and financial minds in the world to teach economics fundamentals and help you make better financial decisions.

The people need to be awakened to the reality of left-wing policies that are destructive, such as raising the minimum wages, increasing taxes and expanding government. The biased media and educational system has failed Americans. We have created a nation of economically illiterate people. PragerU has taken action.