April is Financial Literacy Month.
I know that sounds like something a bank made up to get people to open new checking accounts, but stay with me.
Because there's a more instructive economics lesson playing out in real time right now than anything your kid is going to find in a classroom, and it's happening at fast food restaurants across California.
In April 2024, Gavin Newsom signed a law mandating a $20 minimum wage for fast-food workers. He said it would help working people keep pace with the rising cost of living. I have no reason to believe that he didn’t think it would totally work, but that’s a different discussion.
Recently, a team of researchers from UC Santa Cruz (not exactly a free-market think tank, btw) went and actually looked at what has happened over the last two years.
They studied more than 100 franchise and independent restaurants, talked to owners and managers, and reviewed financial records and hiring data. The results showed that menu prices went up 8 to 12 percent. Yes, workers are earning more per hour, but they are also working fewer hours per week. Overtime has largely been eliminated, and benefits are harder to qualify for.
Burger King, McDonald's, and Taco Bell are all fast-tracking the adoption of kiosks and AI ordering systems to replace the human labor they can no longer afford to pay for.
Newsom's office pushed back immediately, calling the findings "flat wrong," and claiming the study was based on "a handful of interviews on one street in Santa Cruz." They pointed to a competing study out of UC Berkeley showing modest price increases and no major job losses.
The problem with the Berkeley study is that it conveniently left out automation entirely. They ignored the quiet, steady replacement of human workers with machines that don't need overtime or health benefits at all. Forgive me for not believing that was an accident.
Of course, I’ve seen this movie before, and so have you.
This outcome was completely predictable. Not because I'm particularly smart, but because the underlying principle is so simple that most kids can grasp it on the first try.
When the cost of something goes up, people find ways to use less of it. Labor isn’t excluded from this truth. It has always worked this way. It will always work this way. The only people consistently surprised that it works this way are the ones whose actual job it is to know.
That's the thing about financial literacy that doesn't get talked about enough. It isn't really about budgets and savings accounts, though those do matter. It's about having a set of guiding principles that let you look at a policy—any policy—and ask: then what? Who bears the cost? Where does it end?
These aren't complicated ideas. They're just the ones most people were never taught.
That's the whole reason the Tuttle Twins exist. Our book The Tuttle Twins and the Food Truck Fiasco—based on Henry Hazlitt's Economics in One Lesson—walks kids through exactly this dynamic: what happens when laws protect established players from competition, who pays the price, and where the costs end up.
The Tuttle Twins and the Messed Up Market gets into incentives and why people don't respond to policies the way policymakers expect. Creature from Jekyll Island covers inflation and what it actually does to a family's savings. The teen Choose Your Consequence books drop Ethan and Emily into economic crises with real consequences, and let the reader's decisions drive the outcome!
Really, that's what the whole library does, from the toddler board books like the ABC’s of Economics, all the way through to our Free Market Rules full economics curriculum. It takes the ideas that explain how the world actually works and makes them accessible to kids before the official version gets there first.
April is as good a time as any to start your family’s financial literacy journey. You can browse our whole financial literacy collection here!
Somewhere in California right now, a fast food worker is staring at a kiosk that wasn't there two years ago.
Gavin Newsom still thinks it worked (in fact, there’s even talk of raising the wage again!), and he'll keep thinking that until enough people understand why it didn't.
The only antidote to all this financial illiteracy is a generation that knows how to read the story underneath the story. Thankfully, that's exactly the problem you’re trying to solve.
Thank you for letting us help in the vital work you’re doing!
— Connor
