California rising minimum wage causes yet another restaurant to close

Original Perry's owner Paul Fraga says he doesn't think the increase helps his employees 'at all'

California's minimum wage is set for 2020 at $12 an hour for companies with fewer than 25 employees. Because of the rising minimum wage, some restaurants are closing down, saying it's too unaffordable to be sustainable.

Continue Reading Below

Original Perry's owner Paul Fraga told FOX Business' Neil Cavuto on Tuesday his restaurant was open 24 hours for more than 51 years, but five years ago, he noticed something was wrong financially.

"California is a really rough place to run a small business ... everything's more expensive."

- Paul Fraga, Original Perry's owner

"I wasn't making any money, and my sales were up 20 percent in those five years," Fraga said on "Cavuto: Coast to Coast."

PEOPLE AT THE BOTTOM WILL BE HIT HARDEST BY MINIMUM WAGE INCREASES: FORMER MCDONALD'S CEO

Fraga took his books into a financial consultant to get them analyzed.

"I paid him $1,500 for him to tell me that I overpaid by anywhere from 5 to 6 percent," Fraga said.

"If they could sign a waiver, 99 percent of my servers would be against a minimum wage increase because it drops their tips because their bill has to go up."

- Paul Fraga, Original Perry's owner

According to the California Department of Industrial Relations, California's minimum wage has changed as follows:

  • 2017 - $10 an hour
  • 2018 - $10.50 an hour
  • 2019 - $11 an hour
  • 2020 - $12 an hour

Fraga said his cooks make more than the minimum wage, so little increases become a significant problem for him.

CLICK HERE TO READ MORE ON FOX BUSINESS

"For every dollar that goes up, it costs me around $40,000 to the bottom line, and that's a lot," Fraga said. "I can't raise the menu fast enough to compensate that ... California is a really rough place to run a small business ... everything's more expensive."

He said he doesn't think California cares about restaurant owners or the employees making minimum wage, either.

MINIMUM WAGE STRANGLING SEATTLE RESTAURANT WORKERS

"If they could sign a waiver, 99 percent of my servers would be against a minimum wage increase because it drops their tips because their bill has to go up," Fraga said. "I don't know who it's helping. It's not helping me, and it's not helping my employees at all."

He said after all of this, he's done with managing restaurants. He's planning on becoming a truck driver instead.

GET FOX BUSINESS ON THE GO BY CLICKING HERE