The state of California is facing a serious financial crisis. Recently, it was revealed that there will be a huge budget deficit this year, prompting an immediate response from state lawmakers to address the problem. Last week, California Democratic leaders confirmed they came up with a plan to cut the budget deficit by $17.3 billion after Gov. Gavin Newsom had enjoyed unprecedented surplus budgets of more than $100 billion throughout the COVID-19 pandemic. This measure could be implemented with some budget cuts combined with delays and deferrals for the coming years.
The budget problem
It all started with the pandemic, when California Gov. Newsom had a huge surplus to support the economy. Those “bright times” ended last year when the state had a $32 billion budget gap, but leaders succeeded in managing the situation and overcame the problem without significant reductions in spending. According to the nonpartisan Legislative Analyst’s Office, the budget deficit for this fiscal year could be as large as $73 billion, much higher than what Gov. Newsome anticipated in January, when he expected an actual gap of $37.9 billion.
The measures
California is expected to cut spending in education, public transit, environmental, and other programs, but it won’t cut spending in programs that include support for illegal immigrants. While Californians are yet to feel the impact of these spending cuts, the state raised the minimum wage for certain workers to $20, a law that went into effect on April 1. This measure immediately resulted in higher prices on goods and services, prompting many restaurant chains and businesses to cease operations in California, citing profitability concerns.
Dissatisfaction
Despite enjoying huge support among voters, a growing number of Californians are expressing their disappointment with some of the state’s measures lately. The illegal immigration problem and spending a lot of taxpayer money to provide many free services to immigrants were additionally fueled by budget deficit concerns, price hikes, and the growing number of businesses closing stores as a result of the minimum wage hike. And in the last few days, Gov. Newsom found himself under fire once again—this time for something connected to his very own businesses.
Read also: California faces unexpected problem with illegal immigrants. Taxpayers paying the bill, again.
Workers wanted for below-the-minimum wage
In the last few days, Governor Gavin Newsom of California got some heat because his one of his restaurants is still looking to hire people at $16 an hour, even though the recent state law has increased the minimum wage to $20 an hour for some workers. Radar Online reported that this restaurant, called PlumpJack Café, is in Olympic Valley and is actually part of a bunch of restaurants started by Newsom back in 1992.
The position
The restaurant was looking to hire a part-time busser. According to the job posting, found by the New York Post, the future employee would “aim to assist the food server” and “ensure guest satisfaction during all aspects of the dining experience.” That is where it was mentioned that the restaurant will pay just $16 per hour plus tips.
Even though PlumpJack Café doesn’t have to pay the new $20 an hour minimum wage under the new state law, people are wondering why anyone would want to work there for $16 an hour when places like McDonald’s or Burger King are now offering $20 an hour for similar types of work.
The comments
“I wonder why [Newsom’s] food businesses don’t pay $20/hour?” GOP Assembly Member Joe Patterson said on X, formerly known as Twitter. “Live job posting at $16/hr in Olympic Valley. It’s very, very expensive to live there,” Patterson continued, “but he doesn’t do as he tells others and doesn’t pay a living wage.”
I wonder why @CAgovernor @GavinNewsom’s food businesses don’t pay $20/hour? Live job posting at $16/hr in Olympic Valley. It’s very, very expensive to live there… but he doesn’t do as he tells others and doesn’t pay a living wage. https://t.co/hwppKvQgSY pic.twitter.com/JcVDF5PrsD
— Joe Patterson (@Patterdude) April 2, 2024
“With average $3000 rent prices, and for rent to be 25% of income, minimum “livable wage” would have to be $75 per hour if working 40 hrs per week,” one user commented on the post. “Rules for thee but not for me,” @EO10925 commented. “What an awful hypocrite,” third user said on X. “The fraud prince needs to go,” a user that goes by the name AC50 said.
What an awful hypocrite
— Doug Cifu (@Dougielarge) April 2, 2024
Why Newsom’s business doesn’t offer $20?
The reason Newsom’s PlumpJack Café didn’t have to raise its wages under the new law is that the law targets specific types of restaurants. It focuses on those with minimal or no table service and those that are part of big chains with at least 60 locations nationwide. PlumpJack Group, the company behind the café, only runs four restaurants and bars, plus four wineries, the New York Post added.
Read also: House prices in some areas in California and Florida declining fast, up to 40% reduction
This means it doesn’t hit the mark for having to pay the new $20 minimum wage. Also, Newsom’s team pointed out that since becoming governor in 2018, Newsom hasn’t been involved in the everyday running of his businesses. He even put PlumpJack Group into a blind trust to ensure he’s not directly managing it while he’s in office.
“He has no role in any of the holdings that may be held by the blind trust,” Newsom’s team told the New York Post.
