When I was on vacation recently in Europe, our tour guide would tell us stories every night about her time living as a young bride in Greece with her late husband and young daughter. As we departed, she said she would love to be our guide some day on a trip there someday.
Fast forward to a few weeks after arriving home. On my way to the grocery store, I drove past a Greek restaurant called Opa Opa! Though I had driven past it a million times, I had never really noticed it until Greece was on my mind. I made a mental note to check out their menu upon returning home.
When I Googled the menu, I was surprised to be greeted by this headline – “East Sac’s Opa Opa! To close after 14 years, citing mounting wage pressure.”
Owner Phil Courey told Sacramento’s ABC 10 that his restaurant was closing thanks to California’s push for a $15 minimum wage.
“A dollar a year every January is a lot of pressure for a lot of small businesses like myself, including but not limited to the restaurant industry,” he said. “Any service that employs minimum wage is suffering, I can tell you that.”
Courey’s story is not an isolated incident. As our Kerry Jackson has written, “economists have shown that minimum-wage laws and minimum-wage increases kill jobs, especially for the low-skilled workers they’re supposed to help, and close businesses while failing to reduce poverty rates.”
He cites a 2017 analysis by a pair of Harvard economists on the effect of a minimum wage increase on Bay Area restaurants. They argue that, “a one-dollar increase in the minimum wage leads to a 14 percent increase in the likelihood of exit for a 3.5 star restaurant (which is the median rating).”
Then there’s a recent UC Riverside analysis which shows that, absent the push toward a $15 minimum wage, the restaurant industry in California would create 30,000 more jobs than expected between 2017 and 2022.
As PRI’s Wayne Winegarden wrote in his recent study, if policymakers are serious about wanting to help low-income and immigrant communities move up the economic ladder, they won’t enact costly mandates like the $15 minimum wage that actually make it harder to create jobs and raise incomes. They’ll instead embrace entrepreneurship as the key to upward mobility – and removed legislated barriers to opportunity such as costly minimum wage increase.
The moral of this story is – I guess I’ll have to wait until I take a tour of Greece led by my new tour guide friend before I’ll get to enjoy some good spanakopita or gyros.
Tim Anaya is the Pacific Research Institute’s communications director.