The Rise of Gavin Newsom
Gavin Newsom officially became governor of California in 2019 after a popular campaign which focused on affordable housing and universal health care.
Source: Wikimedia
Despite mixed opinions on his performance as governor, Newsom was elected for a second term in 2022 after beating Republican state senator Brian Dahle. In the two years that followed, Newsom implemented several new bills that continued to cause controversy in the state.
Kevin O’Leary Shares His Thoughts on California
Popular shark tank investor Kevin O’Leary appeared on Fox News to discuss the current state of California. He alleges Gavin Newsom had played a significant role in the economic decline of small business ventures that are currently struggling to survive.
“It’s a triple whammy. You have people’s preferences and how they dine after the pandemic has changed dramatically. They don’t go out as much. Then you have inflation itself,” said O’Leary on Fox’s “The Big Money Show.”
Newsom’s Policy Mistakes
O’Leary went on to suggest the California government has made numerous policy mistakes that have directly affected local businesses.
Source: Wikimedia
“But also, you’ve got policy mistakes. I’m here in California shooting season 16 of ‘Shark Tank.’ The casual dining sector in this state has been decimated by a policy mistake on minimum wage. They’re shutting down left and right,” he said.
The Minimum Wage Hike
It’s clear O’Leary is referring to one bill in particular, Newsom’s new minimum wage law, which became official back in April.
Source: Freepik
California law stipulates that any restaurant with 60 or more locations must pay its workers a minimum of $20 per hour.
Effects of the New Law on Fast Food Restaurants
According to data published by Placer Ai, the new law has led to a significant increase in menu item prices for almost all quick-service food chains in the state.
Source: Wikimedia
Some restaurants have been forced to raise their prices by 10%, whereas others have been left with no choice but to increase them by more than 15%. Naturally, these hikes have had a negative effect on business.
Foot Traffic Drops in California
The study revealed that during the months of February and March, foot traffic at many of the major restaurants throughout the state actually increased compared to previous years.
Source: Freepik
However, once Newsom’s new minimum wage law went into effect, the percentage experienced a significant drop.
Restaurants Struggle to Keep Up With Rising Costs
Due to the drop in customers, underperforming restaurants in certain locations throughout the state have struggled to keep up with the rising costs associated with the wage hike.
Source: Freepik
Unfortunately, this has left many business owners with no other option but to close their restaurants, often sharply and in an “unexpected manner,” reports Fox News.
Newsome Has Made a Huge Mistake
According to O’Leary, Newsom should bear the brunt of the blame for this, claiming, “Gavin Newsom made a huge mistake. I think he knows that now, he’s turning this state into a sort of version of Venezuela.”
Source: Wikimedia
He contiuned, “And it’s just killing business, not only in restaurants, but in everything. There’s all kinds of capital leaving here for more competitive states.”
O’Leary Offers Advice to Newsom
During his appearance on The Money Show, O’Leary offered advice to Newsom.
Source: Wikimedia
The Shark Tank star suggested the governor follow in the footsteps of states such as Texas, Florida, and Tennessee, which are experiencing periods of financial stability.
Newsom’s Team Fires Back at O’Leary
Gov. Gavin Newsom’s deputy director of communications responded to O’Leary’s remarks during a statement to Fox News Digital, suggesting the Shark Tank investor had indulged in disinformation.
Source: Wikimedia
“It seems as though Kevin O’Leary wasn’t able to wade through the corporate disinformation like his former, and far more successful” colleague, Mark Cuban, they wrote before adding a recent tweet from the former Mavericks owner.
California Will Become a Shell of Itself
Despite sharing his opinion on Newsom’s mistakes, O’Leary clearly harbored no ill intent toward the governor and went on to call him a nice guy at the end of the interview.
Source: Wikimedia
“Listen, I’ve met him. He’s a nice guy, but I can’t be more critical of his policies. He’s a bad manager. He’s decimated this place. I’ve been coming here for 15 years; this is a shell of what it used to be,” he said.