Kevin O’Leary, better known as “Mr. Wonderful” from Shark Tank, is sounding the alarm on what he calls a catastrophic policy blunder by Governor Gavin Newsom. According to O’Leary, the state’s recent decision to mandate a $20 minimum wage for restaurants with 60 or more locations is wreaking havoc on the economy and driving businesses into the ground.
On The Big Money Show, O’Leary didn’t mince words. “It’s a triple whammy,” he declared, pointing out that post-pandemic shifts in dining habits, rampant inflation, and poorly conceived policies are collectively decimating California’s casual dining sector. Restaurants are shutting their doors left and right, unable to cope with the surging costs.
Just over two months ago, when this minimum wage law was introduced, many quick-service chains responded by hiking menu prices by mid-single to mid-teens percentages. Initially, foot traffic at these major chain restaurants was up, even surpassing national averages. But once the wage hike took effect in April, it was like flipping a switch—businesses started failing, and closures became the new norm.
O’Leary didn’t hold back in his critique, likening California’s economic policies to those of Venezuela. “Gavin Newsom made a huge mistake. He’s killing business, not just in restaurants but across the board. Capital is fleeing to more competitive states,” O’Leary stated. He specifically highlighted states like Tennessee, Florida, and Texas, which offer more business-friendly environments.
And let’s be real, who doesn’t want a piece of that sweet, low-tax, pro-business pie? As O’Leary sees it, California’s stringent regulations and high operating costs are pushing investors and entrepreneurs to pack their bags and head for greener pastures. “I’ve been coming here for 15 years, and it’s deteriorated significantly,” he added, painting a grim picture of the state’s economic trajectory.
Governor Newsom’s team, however, isn’t taking these criticisms lying down. Newsom’s deputy director of communications fired back, suggesting O’Leary had fallen prey to corporate disinformation. They pointed to U.S. Bureau of Labor Statistics data showing California added 4,500 fast food jobs since the wage increase took effect. Newsom’s office also referenced a tweet from Mark Cuban, another *Shark Tank* star, defending the minimum wage hike.
But O’Leary remains unconvinced. “Listen, I’ve met him. He’s a nice guy, but I can’t be more critical of his policies,” he remarked. For O’Leary, California is a shadow of its former self, and unless drastic changes are made, the state’s economic woes will only deepen.
So, what’s the takeaway here? If you’re a business owner in California, brace yourself. With rising costs and regulatory burdens, it might be time to consider whether the Golden State still holds that golden opportunity—or if it’s time to explore other horizons.
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