California’s economic and small business environment has been hit by a "triple whammy," according to O’Leary Ventures Chairman Kevin O’Leary.
"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," O’Leary noted Monday on "The Big Money Show."
"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 further detailed.
More than two-and-a-half months ago, a California law went into effect that mandates a $20 minimum wage for restaurants with 60 or more locations.
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New data published by Placer.ai last week found that as a result of the new law, most quick-service chains have raised menu prices in the state by anywhere from the mid-single digits to mid-teens, percentage-wise, and the price hikes are hurting business.
The analysis found that during February and March of this year, foot traffic at major chain restaurants in California was actually up year-over-year and higher than the national average, but that abruptly shifted after the wage hike went into effect.
As a result, underperforming restaurants have been unable to keep up with rising costs, therefore closing their establishments' doors and often in an unexpected manner.
"Gavin Newsom made a huge mistake. I think he knows that now, he's turning this state into a sort of version of Venezuela," O’Leary criticized. "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."
States like Tennessee, Florida and Texas, according to the "Shark Tank" investor who feels California’s governor should take a page from.
However, in a statement to Fox News Digital, Gov. Gavin Newsom's deputy director of communications said "it seems as though Kevin O’Leary wasn’t able to wade through the corporate disinformation like his former, and far more successful" colleague and linked to a recent tweet from Mark Cuban on the minimum wage topic.
Newsom's office also cited U.S. Bureau of Labor Statistics data that shows California added 4,500 jobs in the fast food industry since the $20 wage mandate was signed and took effect in April.
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"Listen, I’ve met him. He's a nice guy, but I can't be more critical of his policies," O’Leary said. "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."
FOX Business’ Breck Dumas contributed to this report.
