Chevron joins the parade of companies, big and small, saying goodbye to Califonia, the once golden state, to Houston, Texas, because of overregulation. The result of the goodbye parade is jobs and tax revenue. Many of these regulations target the revenue of corporations involved with fossil fuels.
As the WSJ explained, the list of anti-Chevron state policies includes a low-carbon fuel standard, cap-and-trade fees, drilling restrictions, and a penalty on “excessive” refinery margin. To add insult to injury, the Richmond City Council has put on the November ballot a $1 a barrel tax on Chevron’s refinery, one of the largest in the state.
The war on the industry has caused production to fall by more than half in the last decade and several refineries have shut down. Gasoline prices have surged $1.16 a gallon above the national average. Whenever a refinery has problems, prices rise even more owing to lack of supply—sometimes above $6 a gallon.
Chevron sent a press release announcing the move that said nothing about California’s regulation. But beyond the release, the company’s management wasn’t quite as pleasant in TV interviews.” We believe California has several policies that raise costs, that hurt consumers, that discourage investment, and ultimately we think that’s not good for the economy in California and for consumers,”‘
Chevron joins a long list of companies leaving California, including Elon Musk’s SpaceX, Anaplan Software, Cacique Foods, McAfee, and Tesla, just to name a few.
Another new California law is forcing fast-food locations to close or fire employees. Beginning on April 1, 2024, any fast-food location that’s part of a chain with 60+ California locations must pay its employees at least $20.00 per hour. That’s a giant leap from the previous minimum of $15.50 per hour (25%).
The minimum wage increase led to some bad results that were all predicted before the start of the wage increase. Increased labor costs led to cost cuts. Many hurt employees, including cutting the number of employees, reducing hours, closing during slower parts of the day, or serving menu items that take less time to make, for example. Despite the menu changes:
It is nothing short of bizarre that California would choose to specify a substantially higher minimum wage for its fast-food industry, which tends to hire workers who are much younger than other industries, which have a minimum wage of about $16 per hour. About 30 percent of fast-food workers are teens, and another 30 percent are between twenty and twenty-four years old. With 60 percent of its workforce twenty-four or younger, the fast-food industry stands in sharp contrast to the other industries, in which only about 13 percent of workers are that young.
The job and tax revenue losses resulting from California’s total disregard for simple economics prove California’s government chose the best day for the minimum wage increase: April Fools Day—laws created by California’s government fools.
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