As California raises the minimum wage for fast food workers, a popular ice cream chain has closed.
On April 1, a Fosters Freeze store in Lemoore, California, located roughly three hours north of Los Angeles, was abruptly shut down.
Sudden Wage Hike Coincides with Store Closure
That happened the same day the new minimum wage law took effect, raising pay for fast food workers to $20 an hour from $4.
Some employees initially thought the store's closure was an April Fool's prank.
"I was completely taken by surprise. We received no warning at all. Just earlier, the owner had wished me a Happy Easter," said Monica Navarro, Assistant General Manager, speaking to Fox affiliate KMPH.
"Please be kind to your fast food workers," urged Navarro. "Their hours are significantly reduced, and they work much shorter shifts. They will also face upset customers who are angry about the price increases."
In response to the wage hike, restaurant owners have been taking measures such as cutting hours, laying off employees, and sometimes turning to automation to handle tasks previously done by human workers.
These changes are part of the industry's strategy to manage the financial impact of higher wages.
Another former employee shared a similar reaction. "We got a text in our group chat about the shutdown, and I thought it was an April Fools joke," Jason Boado explained to the same news outlet.
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However, it turned out to be a grim reality."The last thing I ever wanted was to close down," Loren Wright, the owner of the Fosters Freeze, confessed to the reporter.
"By Friday night, I knew it was likely I couldn't keep the store open, but I didn't want to spoil their Easter Sunday," he added.
In the months leading up to the recent wage increase, economic experts had warned that businesses might close or cut jobs.
"Usually, business owners pass these cost increases to the customers," explained Rich Mostert, director of the Small Business Development Center at Clovis Community College.
Despite these warnings, the store owner planned to adapt rather than close. "He talked to us about preparing to pay $20 an hour. There wasn't any talk of closing. He said we'd operate with smaller teams and shorter shifts but that we would manage by slightly raising prices," shared Monica Navarro, reflecting on earlier conversations with her employer.
Wage Hike Impacts Local Small Businesses
Wright explained that the recent increase in minimum wage has made it difficult for small businesses like his to remain open.
"Small businesses can't handle a more than 120% increase in the minimum wage over the last decade. We're all poorer than we were ten years ago, which shows that raising the minimum wage isn't helping," he commented to the media.
Navarro expressed that she and her former colleagues preferred to keep their old wages instead of losing their jobs altogether. "From what I've heard from my employees, we all would have chosen to stay at our previous wage because now we're unemployed," she told Fox Business.
She also noted the broader impact of the wage increase on local restaurants. "For those still employed in nearby areas where wages rose to $20 an hour, their hours have been drastically reduced. Fewer people are working each shift, making their jobs much harder," she added.
The U.S. Sun has reported several similar closures, including Friendly's, another ice cream chain recently shut down in Long Island.
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