California’s economic and small business landscape is reeling from a "triple whammy," says O’Leary Ventures Chairman Kevin O’Leary.
"It's a triple whammy. People's dining habits post-pandemic have drastically changed. They dine out less… And then there's inflation," O’Leary stated on "The Big Money Show" Monday.
He continued, "But there are also policy blunders. I'm in California shooting season 16 of 'Shark Tank.' The casual dining sector here is wrecked by a policy mistake on minimum wage. Restaurants are shutting down everywhere."
Over two-and-a-half months ago, California introduced a law mandating a $20 minimum wage for restaurants with 60 or more locations.
According to new data from Placer.ai, many quick-service chains in California have increased menu prices by mid-single to mid-teens percentages due to the new law, impacting business negatively.
The data showed that in February and March this year, foot traffic at major chain restaurants in California was up year-over-year, surpassing the national average. But after the wage hike, things took a turn.
Many struggling restaurants couldn't cope with rising costs and closed unexpectedly.
"Gavin Newsom made a huge mistake. He's turning California into a version of Venezuela," O’Leary criticized. "It's killing business, not just in restaurants but across the board. Capital is fleeing to more competitive states."
States like Tennessee, Florida, and Texas are more appealing now, according to O’Leary, who suggests California’s governor should take notes.
In response, Gov. Gavin Newsom's deputy director of communications told Fox News Digital that "it seems as though Kevin O’Leary wasn’t able to wade through the corporate disinformation like his former, and far more successful" colleague. They linked to a tweet from Mark Cuban on the minimum wage issue.
Newsom's office also pointed to U.S. Bureau of Labor Statistics data indicating California added 4,500 fast food jobs since the $20 wage law took effect in April.
"Listen, I've met him. He's a nice guy, but I can't be more critical of his policies," O’Leary remarked. "He's a bad manager. California is a shadow of its former self. I've been coming here for 15 years, and it's deteriorated significantly."