California restaurant owner fears $20 wage hike will put him out of business: 'Increase prices or close'

After hustling to keep his doors open throughout the pandemic, a Los Angles restaurant owner is speaking out against the state’s newly enacted $20 minimum wage law, fearing it could be the final straw that puts him and his employees out of business.

Justin Foronda, the owner of HiFi Kitchen in Filipinotown ,a neighborhood in Los Angeles, has spent the last several years enacting new and creative ideas to keep his restaurant afloat, navigating an industry devastated by widespread closures during the pandemic.

An LA Times column released on Saturday titled, "Small-business owners brace for uncertainty as the $20 hourly fast-food wage takes effect," details Foronda's plight as he and other restaurant owners say they're suffering at the hands of the state’s newly enacted $20 minimum wage.

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To counteract the financial repercussions of the pandemic, Foronda, 37, hosted a Filipino holiday market across from his restaurant to attract customers, started a board game night and arranged for a panel of DJs and emcees to discuss the history of Filipinos in hip-hop. While his initiatives have gone a long way in boosting his revenue, Foronda has also had to take a job as a nurse on weekends to keep his restaurant of five years open, the columnist writes.

Now, with California’s new minimum wage law for fast-food workers taking effect, Foronda told the LA Times he's not sure how much longer he can keep his head above water.

"He supports a higher minimum wage and tries to pay his employees generously. But the minimum wage is rising so fast that the increased compensation he planned to offer as a retention strategy quickly becomes the new minimum," the author wrote.

The new California statewide legislation went into effect earlier this month and enforces a $20 minimum wage for restaurants that have at least 60 locations nationwide, except those that make and sell their own bread. 

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While the law doesn't directly apply to Foronda's business, it has become an additional stress for small businesses struggling to keep up with industry standard salaries, inflation, rising food costs and increasing rental prices.

Foronda and others aren't convinced they will be able to absorb the wage hike this time. 

"It’s like we’re playing Mario Kart, and we’re just always trying to make it to that boost," he told the outlet.

California-based celebrity chef Andrew Gruel warned of the law's unintended impact during an appearance on "Ingraham Angle" earlier this month. Gruel said the $20 worker mandate in California was branded as a policy targeting large fast food corporations, but that it would trickle down to smaller business owners who have already had to raise prices.

"This was marketed as a way in which the corporations were going to pay their fair share and help the workers, but in reality, this is actually going to help the corporations, and it's going to hurt the workers and the small businesses," he told Fox News' Laura Ingraham.

Fast food chains in California will cut hours and lay off employees, Gruel said.

But, "Small businesses, who are not required by law to pay the $20 an hour but when more than 40 or 45 percent of all the restaurants in California are…targeted by this bill, everybody has to increase their floor in terms of paying that number," he explained.

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"So," he continued, "they're almost by proxy through this bill, mandating everyone to pay this $20 an hour and the small businesses, they don't have the disposable income or the capital to automate," he told Ingraham.

"So they're either going have to increase their prices or close."