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The fast-food industry claims the California minimum wage law is costing jobs. Its numbers are fake

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The fast-food industry claims the California minimum wage law is costing jobs. Its numbers are fake

The fast-food industry has been wringing its hands over the devastating impact on its business from California’s new minimum wage law for its workers.

Their raw figures certainly seems to bear that out. A full-page ad recently placed in USA Today by the California Business and Industrial Alliance asserted that nearly 10,000 fast-food jobs had been lost in the state since Gov. Gavin Newsom signed the law in September.

The ad listed a dozen chains, from Pizza Hut to Cinnabon, whose local franchisees had cut employment or raised prices, or are considering taking those steps. According to the ad, the chains were “victims of Newsom’s minimum wage,” which increased the minimum wage in fast food to $20 from $16, starting April 1.

The rapid job cuts, rising prices, and business closures are a direct result of Governor Newsom and this short-sighted legislation

— Business lobbyist Tom Manzo, touting misleading statistics

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Here’s something you might want to know about this claim. It’s baloney, sliced thick. In fact, from September through January, the period covered by the ad, fast-food employment in California has gone up, as tracked by the Bureau of Labor Statistics and the Federal Reserve. The claim that it has fallen represents a flagrant misrepresentation of government employment figures.

Something else the ad doesn’t tell you is that after January, fast-food employment continued to rise. As of April, employment in the limited-service restaurant sector that includes fast-food establishments was higher by nearly 7,000 jobs than it was in April 2023, months before Newsom signed the minimum wage bill.

Despite that, the job-loss figure and finger-pointing at the minimum wage law have rocketed around the business press and conservative media, from the Wall Street Journal to the New York Post to the website of the conservative Hoover Institution.

We’ll be taking a closer look at the corporate lobbyist sleight-of-hand that makes job gains look like job losses. But first, a quick trot around the fast-food economic landscape generally.

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Few would argue that the restaurant business is easy, whether we’re talking about high-end sit-down dining, kiosks and food trucks, or franchised fast-food chains. The cost of labor is among the many expenses that owners have to deal with, but in recent years far from the worst. That would be inflation in the cost of food.

Newport Beach-based Chipotle Mexican Grill, for example, disclosed in its most recent annual report that food, beverage and packaging cost it $2.9 billion last year, up from $2.6 billion in 2022 — though those costs declined as a share of revenue to 29.5% from 30.1%. Labor costs in 2023 came to $2.4 billion, but fell to 24.7% of revenue from 25.5% in 2022.

At Costa Mesa-based El Pollo Loco, labor and related costs fell last year by $3.5 million, or 2.7%, despite an increase of $4.1 million that the company attributed to higher minimum wages enacted in the past as well as “competitive pressure” — in other words, the necessity of paying more to attract employees in a tight labor market.

Then there’s Rubio’s Coastal Grill. On June 3 the Carlsbad chain confirmed that it had closed 48 of its California restaurants, about one-third of its 134 locations. As my colleague Don Lee reported, Rubio’s attributed the closings to the rising cost of doing business in California.

There’s more to the story, however. The biggest expense Rubio’s has been facing is debt — a burden that has grown since the chain was acquired in 2010 by the private equity firm Mill Road Capital. By 2020, the chain owed $72.3 million, and it filed for bankruptcy. Indeed, in its full declaration with the bankruptcy court filed on June 5, the company acknowledged that along with increases in the minimum wage, it was facing an “unsustainable debt burden.”

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The company emerged from bankruptcy at the end of 2020 with settlements that included a reduction in its debt load. Then came the pandemic, a significant headwind. Among its struggles was again its debt — $72.9 million owed to its largest creditor, TREW Capital Management, a firm that specializes in lending to distressed restaurant businesses. It filed for bankruptcy again on June 5, two days after announcing its store closings. The case is pending.

Fast-food and other restaurant jobs slump every year from the fall through January, due to seasonal factors (red line); seasonal adjustments (blue line) give a more accurate picture of employment trends. The sharp decline in 2020 was caused by the pandemic.

(Federal Reserve Bank of St. Louis)

It’s worth noting that high debt is often a feature of private-equity takeovers — in such cases saddling an acquired company with debt gives the acquirers a means to extract cash from their companies, even if it complicates the companies’ path to profitability. Whether that’s a factor in Rubio’s recent difficulties isn’t clear.

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That brings us back to the claim that job losses among California’s fast-food restaurants are due to the new minimum wage law.

The assertion appears to have originated with the Wall Street Journal, which reported on March 25 that restaurants across California were cutting jobs in anticipation of the minimum wage increase taking effect on April 1.

The article stated that employment in California’s fast food and “other limited-service eateries was 726,600 in January, “down 1.3% from last September,” when Newsom signed the minimum wage law. That worked out to employment of 736,170 in September, for a purported loss of 9,570 jobs from September through January.

The Journal’s numbers were used as grist by UCLA economics professor Lee E. Ohanian for an article he published on April 24 on the website of the Hoover Institution, where he is a senior fellow.

Ohanian wrote that the pace of the job loss in fast-food was far greater than the overall decline in private employment in California from September through January, “which makes it tempting to conclude that many of those lost fast-food jobs resulted from the higher labor costs employers would need to pay” when the new law kicked in.

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CABIA cited Ohanian’s article as the source for its claim in its USA Today ad that “nearly 10,000” fast-food jobs were lost due to the minimum wage law. “The rapid job cuts, rising prices, and business closures are a direct result of Governor Newsom and this short-sighted legislation,” CABIA founder and president Tom Manzo says on the organization’s website.

Here’s the problem with that figure: It’s derived from a government statistic that is not seasonally adjusted. That’s crucial when tracking jobs in seasonal industries, such as restaurants, because their business and consequently employment fluctuate in predictable patterns through the year. For this reason, economists vastly prefer seasonally adjusted figures when plotting out employment trendlines in those industries.

The Wall Street Journal’s figures correspond to non-seasonally adjusted figures for California fast-food employment published by the Bureau of Labor Statistics. (I’m indebted to nonpareil financial blogger Barry Ritholtz and his colleague, the pseudonymous Invictus, for spotlighting this issue.)

Figures for California fast-food restaurants from the Federal Reserve Bank of St. Louis show that on a seasonally adjusted basis employment actually rose in the September-to-January period by 6,335 jobs, from 736,160 to 742,495.

That’s not to say that there haven’t been employment cutbacks this year by some fast-food chains and other companies in hospitality industries. From the vantage point of laid-off workers, the manipulation of statistics by their employers doesn’t ease the pain of losing their jobs.

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Still, as Ritholtz and Invictus point out, it’s hornbook economics that the proper way to deal with seasonally adjusted figures is to use year-to-year comparisons, which obviate seasonal trends.

Doing so with the California fast-food statistics give us a different picture from the one that CABIA paints. In that business sector, September employment rose from a seasonally adjusted 730,000 in 2022 to 741,079 in 2024. In January, employment rose from 732,738 in 2023 to 742,495 this year.

Restaurant lobbyists can’t pretend that they’re unfamiliar with the concept of seasonality. It’s been a known feature of the business since, like, forever.

The restaurant consultantship Toast even offers tips to restaurant owners on how to manage the phenomenon, noting that “April to September is the busiest season of the year,” largely because that period encompasses Mother’s Day and Father’s Day, “two of the busiest restaurant days of the year,” and because good weather encourages customers to eat out more often.

What’s the slowest period? November to January, “when many people travel for holidays like Thanksgiving or Christmas and spend time cooking and eating with family.”

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In other words, the lobbyists, the Journal and their followers all based their expressions of concern on a known pattern in which restaurant employment peaks into September and then slumps through January — every year.

They chose to blame the pattern on the California minimum wage law, which plainly had nothing to do with it. One can’t look into their hearts and souls, but under the circumstances their arguments seem more than a teensy bit cynical.

The author of the Wall Street Journal article, Heather Haddon, didn’t reply to my inquiry about why she appeared to use non-seasonally adjusted figures when the adjusted figures were more appropriate. Tom Manzo, the founder and president of CABIA, didn’t respond to my request for comment.

Ohanian acknowledged by email that “if the data are not seasonally adjusted, then no conclusions can be drawn from those data regarding AB 1228,” the minimum wage law. He said he interpreted the Wall Street Journal’s figures as seasonally adjusted and said he would query the Journal about the issue in anticipation of writing about the issue later this summer.

He did observe, quite properly, that the labor cost increase from the law was large and that “if franchisees continue to face large food cost increases later this year, then the industry will really struggle.” Fast-food companies already have instituted sizable price increases to cover their higher expenses, he observed. “The question thus becomes how sensitive are fast-food consumers to higher prices,” a topic he says he will be researching as the year goes on.

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Nearly 60 gigawatts of U.S. clean power stalled, trade group finds

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Nearly 60 gigawatts of U.S. clean power stalled, trade group finds

A total of 59 gigawatts of U.S. clean energy projects are facing delays at a time when demand for power from AI data centers is surging, according to a trade group study.

Developers are seeing an average delay of 19 months over issues such as long interconnection times, supply constraints and regulatory barriers, the American Clean Power Assn. said in a quarterly market report.

The backlog is happening despite the growing need for power on grids that are being taxed by energy-hungry data centers and increased manufacturing. The Trump administration has implemented a slew of policies to slow the build-out of solar and wind projects, including delaying approvals on federal lands.

The potential energy generation facing delays is the equivalent of 59 traditional nuclear reactors, enough to power more than 44 million homes simultaneously.

“Current policy instability is beginning to impact investor confidence and negatively impact project timelines at a time when demand is surging,” American Clean Power Chief Policy Officer JC Sandberg said in a statement.

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Despite the hurdles, developers were able to bring more than 50 gigawatts of wind, solar and batteries online in 2025, accounting for more than 90% of all new power capacity in the U.S., the report found. Clean power purchase agreements declined 36% in 2025 compared with 2024, signaling that the build-out of clean power in the U.S. could be lower in the 2028 to 2030 time period, according to the report.

Chediak writes for Bloomberg.

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Feud between Vegas gambler and Paramount exec sparks $150-million fraud lawsuit

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Feud between Vegas gambler and Paramount exec sparks 0-million fraud lawsuit

The high-stakes feud between Paramount Skydance President Jeff Shell and Las Vegas gambler and self-professed “fixer” Robert James “R.J.” Cipriani spilled into court on Monday.

Cipriani filed a lawsuit against Shell on claims of fraud and eight other counts, alleging that he reneged on an oral agreement to develop an English-language version of a Spanish music show that streams on Roku TV.

He is seeking $150 million in damages.

In the 67-page lawsuit, filed in Los Angeles County Superior Court, Cipriani claims that in exchange for providing “sophisticated, high-value crisis communications services, entirely without compensation” over 18 months, Shell had agreed to develop the show “Serenata De Las Estrellas,” (Star Serenade), but failed to do so. Cipriani and his wife were to be named as co-executive producers.

“This case arises from the oldest form of fraud: a powerful man took everything a less powerful man had to offer, promised to repay him, lied to him when he asked about it, and then refused to compensate him at all,” states the complaint.

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Cipriani — who has producer credits on a 2020 documentary about Vegas, “Money Machine: Behind the Lies,” and the 2015 movie “Wild Card” — intended to make “Serenata” as a “lasting legacy for his mother,” Regina, saying the effort “has been the driving force and the most important thing consuming [Cipriani’s] entire life of almost sixty-five years,” according to the suit.

The show was inspired by a song that the Philadelphia-born Cipriani used to sing to his late mother when he was growing up.

The litigation is the latest twist in a simmering behind-the-scenes scandal that has left much of Hollywood slack-jawed.

For weeks, Cipriani had threatened to file a lawsuit against Shell, with the potential to derail his comeback at Paramount, three years after he lost his job as NBCUniversal’s chief executive over an inappropriate relationship with an underling.

Cipriani’s suit alleges Shell wasdesperate for help in quelling negative stories about him.

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It also portrays him as someone who was indiscreet, allegedly sharing sensitive information during the period when the Ellison family, through Skydance Media, was preparing to close its deal to acquire Paramount and then was actively pursuing Warner Bros. Discovery to add to its growing entertainment and media empire.

The eventual rift between the unlikely pair began in August 2024. Patty Glaser, the high-powered entertainment litigator, convened a meeting between the two men.

During the meeting with Shell, the executive expressed to Cipriani his concern that emails and texts between him and Hadley Gamble, the CNBC anchor Shell had been involved with, would come out, saying “that would absolutely destroy me,” according to the suit.

Cipriani claims in his lawsuit Shell was facing “catastrophic personal exposure arising from his conduct toward yet another woman in the media industry,” similar to what had prompted his ouster from NBCUniversal and that he “solicited” his “crisis communications services.”

According to the suit, Cipriani was in a position to help him, having engaged in a “longstanding practice of exposing misconduct in the entertainment and media industries.”

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Robert James “R.J.” Cipriani in Amazon Prime Video’s 2025 series “Cocaine Quarterback.”

(Courtesy of Prime)

A high-rolling blackjack player, Cipriani’s colorful résumé includes aiding the FBI in the arrest and conviction of USC athlete-turned global drug kingpin Owen Hanson, who was sentenced to 21 years in federal prison, and filing a RICO suit against Resorts World Las Vegas.

Leveraging his “unique media relationships and industry influence,” Cipriani said in his complaint that he provided Shell with “ongoing threat-monitoring and intelligence services,” and “took proactive steps to suppress, redirect, or neutralize” negative coverage against Shell before publication.

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Cipriani said Shell expressed “effusive gratitude” to him after he planted a story about another entertainment industry figure “in order to divert media attention” away from Shell. “Thank you thank you thank you,” Shell wrote in a text to Cipriani, according to the lawsuit, which included a copy of the text.

During tense negotiations over Paramount’s streaming rights for the highly successful “South Park” franchise last summer, Shell allegedly asked to talk to Cipriani about the matter. Cipriani then “orchestrat[ed] the placement of a highly favorable news article,” that was “devastating to Shell’s and Paramount’s adversaries in the dispute,” the suit states.

After a story published in a Hollywood trade, Cipriani wrote to Shell on WhatsApp, “I’m the one that put the article out for you!!!” and “I didn’t want to tell you till it hit so you have plausible deniability.”

According to a message cited in the lawsuit, Shell responded, “I love you!!!! …Thank you Rj,” adding “I owe you dinner at least!”

Despite those boasts, Paramount ultimately paid “South Park” creators millions more than Skydance had intended. To remove obstacles from Skydance’s path to buy Paramount, the media company agreed to two blockbuster deals that include paying the “South Park” production company more than $1.25 billion to continue the cartoon — making it one of the richest deals in television history.

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During the course of their relationship, Cipriani further alleges that Shell alerted him to a then-pending $7.7-billion Paramount deal for the rights to UFC fights, while Netflix “believed” it had a “handshake deal” for the same rights, according to the suit.

Cipriani disclosed in his lawsuit that he filed a whistleblower complaint with the Securities and Exchange Commission over the disclosure of material information, claiming that Shell told him that not even UFC President Dana White knew of the transaction. In a WhatsApp message cited in the lawsuit, Shell told Cipriani that the deal was “very hush, hush until we sign.”

While the gambler continued to provide his services to Shell gratis, their relationship began to sour.

Cipriani became enraged that Shell did not uphold his end of the alleged deal to help him with the TV show, viewing it as a slap to him and his mother.

In February, the pair met to resolve their growing dispute. According to the lawsuit, also in attendance was an unidentified entertainment attorney who had represented both men in separate matters.

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Patty Glaser has been widely reported as having represented Shell and Cipriani. She introduced them in summer 2024, as The Times reported Saturday.

“We were presented with a draft complaint riddled with clear errors of fact and law,” Glaser said in a statement last week. “We will strongly respond.”

The February meeting did not go well.

Shell not only “refused to compensate” Cipriani, but also told him that he could not “assist” him “in obtaining a television show or other entertainment industry opportunity.”

Cipriani further alleged in his lawsuit that during their “failed summit,” Shell revealed his “disdain” for David Zaslav, the Warner Bros. Discovery CEO, and disclosed that Paramount intended to “sweeten” its pending hostile offer for the studio to fend off Netflix prior to announcing its intention to do so publicly.

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After the meeting, Cipriani stated in his complaint that Shell’s attorney privately offered Cipriani a “$150,000 personal loan” to resolve the dispute.

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With a big $46-million opening for ‘Hoppers,’ Disney and Pixar see a return to form

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With a big -million opening for ‘Hoppers,’ Disney and Pixar see a return to form

Walt Disney Co. and Pixar’s “Hoppers” took the box office crown this weekend in an encouraging sign for the company’s original animated films.

The film generated $46 million in ticket sales in the U.S. and Canada, marking the highest domestic opening for an original animated movie since 2017’s “Coco,” according to studio estimates. The global box office total for “Hoppers” was $88 million.

The zany movie features a young environmental advocate who “hops” her consciousness into a robotic beaver and bands together with other woodland creatures to stop a planned freeway expansion through a glade.

The film is directed by Daniel Chong, who created the Cartoon Network animated series “We Bare Bears.”

The muscular debut for “Hoppers,” as well as the strong performance from Sony Pictures Animation’s “Goat” last month, has been a positive sign for audience interest in original animated films.

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Since the pandemic, theatrical returns for animated sequels have far surpassed that of original films. Disney’s “Zootopia 2,” for instance, has grossed more than $1.8 billion in global box office revenue, with more than $426 million domestically. Disney and Pixar’s 2024 hit “Inside Out 2” also crossed more than $1.6 billion globally.

By contrast, Disney and Pixar’s 2025 original film “Elio” brought in about $154 million in worldwide box office revenue.

Original films are vital to Pixar’s future, as the Emeryville, Calif.-based studio built its reputation on its string of nearly uninterrupted original blockbuster hits, including 1995’s “Toy Story” and 2004’s “The Incredibles.”

Paramount Pictures and Spyglass Media Group’s “Scream 7” came in second at the box office with $17.3 million in its second weekend in theaters. Warner Bros. Pictures’ “The Bride!,” Sony’s “Goat” and Warner Bros.’ “Wuthering Heights” rounded out the top five at the box office, according to data from Comscore.

With several strong releases, as well as popular holdover films from 2025 that continue to bring in revenue, the first few months at the box office have been a notable improvement over last year’s dismal first quarter.

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Domestic box office revenue so far is up more than 12% compared with the same time period in 2025, according to Comscore.

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