A popular Mexican restaurant is closing its doors permanently in California, becoming the latest business to close following the state’s minimum wage increase.
Launched in 2015, Salud Tacos has been a San Diego fixture, serving satisfied customers authentic Latin American cuisine for nearly a decade.
The owner of the renowned Mexican restaurant has identified several factors that contributed to the failure of his business, including problems with leasing and minimum wage increases.
On Salud Tacos’ Instagram page, they discussed their inability to get a new lease for their restaurant.
“This might be one of the hardest things I’ve ever had to express publicly,” the owner said in a statement.
Launched in 2015, Salud Tacos has been a San Diego fixture, serving satisfied customers authentic Latin American cuisine for nearly a decade.
Under Governor Gavin Newsom, California passed a controversial new law requiring fast food restaurants to raise their minimum wage from $16 to $20 an hour, effective April 1.
‘For the past year our lease in Barrio Logan has been coming to an agreement, and we have been trying to negotiate a new lease in our same space, and for the past year nothing has come to fruition.’
They continued, “Not being able to secure what we needed, along with other setbacks beyond anyone’s control, I had to realize that maybe things happen for a reason and are just meant to be.”
The owner concluded: ‘After many sleepless nights, after struggling with many thoughts and emotions, and after much consideration, I have decided to close our doors to Salud as we know it.’
La Bamba, a popular bar associated with Salud, will also close.
The demise of Salud Tacos, which effusive locals referred to as ‘The King of All Tacos,’ has left a void in the community.
Under Governor Gavin Newsom, California passed a controversial new law requiring fast food restaurants to raise their minimum wage from $16 to $20 an hour, effective April 1.
The increase in the minimum wage has contributed to the economic malaise affecting many California restaurants.
Since Newsom introduced the $20 an hour wage, there have been a series of closures, with one restaurant going under after another.
On Salud Tacos’ Instagram page, they talked about their inability to get a new lease for their restaurant.
La Bamba, a popular bar linked to Salud, will also close
Jonathan Maze, editor in chief of Restaurant Business, said he’s not surprised by this result.
‘This is a difficult environment right now for restaurants. We’ll probably continue to see more of this,” Maze said. CBS8.
The food company said the problem was not just the size of the wage increase, but also the way Newsom presented it to the state.
‘It’s not just about a salary increase. It’s his speed. It went up 25 percent basically overnight.
Maze observed: “The effect of this is significant.” Significant’ might be an understatement.
Since the minimum wage law went into effect, an estimated 10,000 jobs have been cut at fast food chains such as Pizza Hut and Burger King, as companies struggle to adapt to higher wages.
Since Newsom introduced the $20 an hour wage, there have been a series of closures, with one restaurant going under after another.
This week, Rubio’s Coastal Grill, a beloved Mexican restaurant chain, filed for Chapter 11 bankruptcy.
Rubio’s Coastal Grill announced it would close 48 restaurants in the state (Pictured: The grand opening of the third Rubio’s in the Pacific Beach neighborhood of San Diego, California in 1986)
But not all companies are able to adapt. This week, Rubio’s Coastal Grill, a beloved Mexican restaurant chain, filed for Chapter 11 bankruptcy. Statewide, Rubio’s has closed 48 locations.
The California Business and Industrial Alliance (CABIA) harshly criticized Governor Gavin Newsom for pushing the law, which has also meant that companies in the state have had to raise prices.
To highlight the law’s impact, the trade group created an ad in Thursday’s edition of USA Today featuring mock “obituaries” for popular brands.
The tongue-in-cheek ad, titled ‘In Memoriam: Victims of Newsom’s Minimum Wage,’ highlighted the problems faced by smaller brands, including Rubio’s, and fast-food giants, including Pizza Hut, Burger King, Subway and McDonald’s.
Features news clips documenting changes made by companies in response to wage increases.
California Governor Gavin Newsom signs the fast food bill surrounded by workers at SEIU Local 721 in Los Angeles on September 28, 2023.
This includes raising prices, laying off workers to reduce labor costs, and in some cases closing locations.
The law signed by Newsom in September of last year increases the minimum wage for fast food workers to $20 an hour in chains with more than 60 locations in the United States.
That’s 25 percent more than California’s standard minimum wage of $16 an hour, which went into effect in January.
Nationally, Congress hasn’t touched the minimum wage in decades: It remains $7.25 an hour. Instead, the so-called “wage wars” take place at the state level.
“California businesses have been under attack and outright assault for years,” CABIA president and founder Tom Manzo told Fox Business.
“It’s just another law that puts businesses in greater danger.”
He said officials would be living in a “fantasy land” if they believe drastic wage increases will actually help workers or businesses.
“You can only raise prices to a certain point,” Manzo told the outlet. And you are seeing it. People aren’t going to pay $20 for a Big Mac. It’s not going to happen.’