Restaurant Chain Quitting Blue State

(RightIsRight.co) – Major restaurant chain Rubio’s Coastal Grill announced it is closing over 40 “underperforming locations” due to “rising costs” after a blue state imposed a new $20 per hour minimum two months ago.

California has seen many restaurants and retail stores shut down due to high crime rates and rising costs.

A Rubio’s Coastal Grill spokesperson said in a statement that after a “thorough review,” the company decided to shut down 48 locations in California. However, 86 stores will remain open in Arizona and Nevada.

“The closings were brought about by the rising cost of doing business in California. While painful, the store closures are a necessary step in our strategic long-term plan to position Rubio’s for success for years to come,” the statement read.

This year, popular restaurants like Manzkes’ Bicyclette and Patrick’s Roadhouse closed because of these issues.

For instance, Lauren and Peter Lemos shut down their Chinatown sandwich shop in October 2023 but reopened in March, realizing they could not afford to stay closed due to incoming bills.

“Costs are higher than ever, risks are higher than ever,” Lemos stated. “I always want to have some kind of optimistic outcome for the future, but I do really worry, ‘Is it going to be sustainable?’ I’m not sure we’ll have mom-and-pop restaurants for a long time more.”

Moreover, former Assistant General Manager at Fosters Freeze Monica Navarro warned in early April, following the state’s minimum wage increase from $16 to $20, that rising costs for workers would impact the business. She said that her business announced its closure on April 1, laying off all employees.

“I can see their intentions with increasing the minimum wage, thinking that it will attract more people, but I honestly don’t think it’ll work. This is not the first business that’s closing,” Navarro claimed.

According to the Wall Street Journal, between last fall, when Democratic California Governor Gavin Newsom signed the rising minimum wage into law, and January, data showed that fast-food employment dropped 1.3%, or about 9,500 jobs.

Restaurants like McDonald’s, Chipotle, and Jack in the Box have raised menu prices due to the wage increases, and 80% of Americans now consider fast food a “luxury” item.

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