Tesla shares up on Musk's $56B pay vote, California's $22 minimum wage backfires, and more

Tesla shares are up after Elon says that he is set for victory for his $56 billion pay vote. And technically they approved it, although there could be legal ramifications. But what's interesting is his brand power is so strong. The company is spending $50+ billion, which is costing, of course, the company money, but the stock went up because of his—

His tweet.

quote unquote brand power, star power. Of course, he's brilliant and smart, but it's kind of crazy to think about that the power of his brand can actually cause a stock to go up when they're spending $50 billion.

To your point, there's still legal hurdles he needs to get through. But the fact that everyone voted, the shareholders voted that he should get paid his money, that just goes to show that, hey, look, guys, a contract was signed already and he fulfilled his obligations. And the legal system shouldn't get involved there, right? So hopefully that all blows over and he gets paid. I do believe he gets paid because what was the bet? The bet was, hey, you're going to take this company to a trillion-dollar valuation. This company that's about to die. And he delivered on what he said he was going to do. And to your point, yes. By the way, whenever he posts something, how many followers does he have now on X? $200 million, something like that, right?

It's something large. Yeah, I'm actually trying to look it up right now. I'm going on X. He has $187 million. That's a lot. Yep.

And by the way, like, if you look at his tweets, he's— it's not like this guy's messing around. Sure, he says some things that are maybe people might not agree with, but look, I'm just looking at his feed right now. He's talking about robotaxis, he's talking about Optimus, These robots that will take them to a $20, $30 trillion market cap, right? He's constantly delivering. He's constantly building. And that's why he was able to rally. I mean, that's why people rallied around him. He didn't even need to really rally people for him. But I think he did ask a couple of times for people to sign and those got millions of impressions each. Yeah.

And it was funny because the Norwegian sovereign wealth fund voted no.

Yeah. Yeah.

And a few other pension funds voted no. And they were explicit about it, but the people spoke. They're like, we love him. We want to motivate him to continue pushing forward. The company's not the same without him. And if he wasn't going to get it, it's not like he threatened to quit or anything like that. You know, he still loves the company that he created, but more so people are like, we want to motivate him and we made a deal and the deal should be honored.

So yeah. And by the way, we can talk about, I mean, you know, you even have politicians that are supporting, Elon, right? And so you have, you know, love him or hate him, you have Trump who, I think in a recent interview said, look, you know, he's our modern version of Thomas Edison. He's just built so many things and he's done so much for humanity, right? So, you know, I think this is good in a world where things are getting crazier and crazier, where courts can just jump in and say, oh, your pay package is voided. I think this is good for the system because You know, what was supposed to have happened actually happened.

Yes, and I agree with you, whether you like the guy or not, if a company has a contract with their own people and, you know, the person fulfilled on the work, the requirements, whatever it is, and then they're supposed to get paid for it, it's just like, I don't understand why the courts meddled in it in the first place.

Yeah, well, we have a lot of meddling going on in today's world, but we'll just leave it at that. I got to take a minute to tell you about the Agency Owners Association. This is a peer group for agency owners owners think YPO or EO but for agency owners. And I just wanted to read you a couple of testimonials. So this first one comes from Carrie, and we asked her, what do you like most about the group? She said, having a group of people to discuss and bounce ideas. The leads are great too. Yes, we share leads in this group as well. This one from Aliyan, he says, the ability to really post whatever I want and need and the group responds. Great experienced members. Getting a lot of insights from conversations with other members. Getting a lot of value from sessions from Eric. Getting advice from And so if you want to grow your agency faster and you want a peer group to do so, just go to marketingschool.io/agency. This is a group that both Neil and I created, and our hope here is to create a vibrant community of agency owners and do a lot more with it in the future. So again, marketingschool.io/agency, and we'll see you inside. Speaking of meddling a little bit, I think it's worth talking about the California— California's $22 minimum wage backfiring. Have you seen this?

No, I didn't even know the minimum wage in California was $22.

A lot of money, man. Um, my dude, my first job, I got paid $7 an hour for putting, uh, new date stickers over expired stickers for a Chinese food place in a warehouse.

But dude, check this out. I was talking to one of my, uh, colleagues and coworkers today. He did not get selected for jury duty. He lives in Arizona, which the minimum wage must be decent as well. Maybe it's not $22 an hour. They're like, yeah, if you get selected for jury duty, you get paid $12 a day. I'm like, whoa, wait, they're not even paying minimum wage for doing work for the government. I'm like, how does this work?

It's $14.35 in Arizona.

Uh, per day?

Per hour.

Oh, per hour. But how are you getting $12 a day for jury duty, not per hour? That's kind of crazy to think about.

Yep, that is insane. So, okay, Mario Nolfal, this is his tweet. California fast food chains cut 10K jobs after $22 minimum wage hike. California fast food restaurants have eliminated nearly 10,000 jobs in response to the state's new $22 minimum wage law, according to the CABI, California Business and Industrial Alliance. I didn't even know that was a thing. The trade group blames Governor Gavin Newsom for pushing the law, which took effect April 1st. Major chains like McDonald's, Burger King, and In-N-Out— wow, In-N-Out— have raised prices, cut hours, and moved towards automation to offset higher wages. Kabiya argues businesses can't sustain such drastic pay increases without consequences. So think about this. And by the way, here, a LendingTree survey found 78% of consumers now see fast food as a luxury due to soaring prices. So a Big Mac meal is actually the same as a Sweetgreen meal that I would get. And Sweetgreen's cooked in olive oil, high-quality ingredients and all that, right? I don't know how Sweetgreen's doing it, but the fact of the matter is if a Big Mac's $8 now just for one Big Mac, it's crazy, which we've talked about on this podcast. Now, if we go to McDonald's, you think about this, okay? There's actually less traffic going to these fast food chains because more and more people are working remotely. And then if you're upgrading the cost and then they're getting less traffic, that means they're getting less customers. What do you think is going to happen to the business?

Dude, totally. And you want to know what's crazy? I was in Malaga, which is a city in Spain. I'll call it a few days ago or a week ago or whenever I was there. I think it was a few days ago. And McDonald's was across the hotel that I was staying at. All right. I don't really eat McDonald's often at all.

You did it again.

No, I didn't end up eating McDonald's, but I just went in there because it was packed. No joke. It was packed. And I was like, what are all these people going to McDonald's for when there's all this food from Spain that they can end up trying out? So I wanted to go in there to see if there was anything different. All right, McDonald's there is pretty much similar to the United States. I haven't been to McDonald's in the United States in ages, but they have all these computer screens. So no one's really taking your orders. It's literally computer screens and you're just clicking buttons on what you want. I didn't place an order for anything, but I started clicking on the computer screens because I just wanted to see the interface and how it worked. And I was just like, oh yeah, what happens if I don't want mayo on my sandwich, right? So I was like, I was clicking on like a chicken sandwich and I was like, can I remove ingredients? You can remove it. It's pretty easy. And you're going to have less errors than if you're talking to someone and they mess up typing it up on the register or clicking a button. But here's what was crazy. Just the sandwich alone, I think the price was somewhere like around €5 or €6. So call it around $6. I was like, what the heck? This is expensive. Now I haven't gone to In-N-Out or any of these places for a long time. But to me, that's expensive. What's cheaper is just going to the grocery store, buying, you know, a patty or a few patties, some few buns and lettuce, tomato, and whatever. And yes, in total you'll spend more, but if you look at the cost per sandwich, you probably can get your cost down to like $1 or $2, which is much more cost effective than spending $5 or $6 just for one sandwich. That's just so expensive.

You know who's worth following on YouTube Shorts for this? It's Jenny Hoyos. So she actually makes $1, she makes like a $1 So she'll compare it to like a Chick-fil-A and she'll make it from scratch. And like the Shorts get tens of millions of views. She does a really good job with these. So anyone, you know, Neil and I aren't necessarily the best at Shorts, I would say, but I would say Jenny Hoyos is definitely worth following. But the point is, going back to like, why are these guys talking about this $22 minimum wage? The point is when you have government interfering again, businesses will get creative. You have very smart people that are running these businesses. They're going to figure out ways around it. It's like, okay, you're going to set the rule over here, the goalpost over here. Okay, I'm going to move around it, right? Oh, we're going to take your pay package away. Okay, we're going to move around it, right? And so, I think the thing is, I think we don't want to make this a political podcast, but in general, what's been more helpful in history when I study history and Neil studied history in the past, we just look at when things have worked really well, it's minimal government intervention. And then you have businesses, you have capitalist societies that are pushing things forward, right? Because they're pushing innovation forward. Because they want to produce goods and services for the people because they get paid for that.

Dude, I totally agree. And I remember once COVID hit, a lot of people moved out from California. And then California started losing a lot of revenue and taxes from these billionaires and, you know, $100 millionaires who are moving out. And it affected their tax revenue. I forgot what portion of California's taxes comes from like the ultra wealthy, but it's a large chunk comes from like The top 10% or whatever the number was at that time. There was a news article on it. Nonetheless, though, it's just like, yes, you want to affect things. You want, you know, you want to tell people like Tesla, like, oh, you got to keep factories closed. And I'm not saying anyone's right or wrong, but these things affect businesses and businesses decide to do what's best for them, which can affect states or governments.

Yep. Yep. So that's the lesson, guys. You can take responsibility for yourself and do what you can. Worry about what you can control. And in Elon's case, he's like, I'm going to vote with my feet and then I'm going to move to All right. So I wanted to take a second to tell you about Leveling Up Founders. This is an event/mastermind for people doing 7, 8, 9 figures. These are founders that are doing that amount. And we've been doing this event for a couple years now. We've had amazing speakers, but more than anything, it's about the people. What I mean by that is like-minded people want to hang out with like-minded people. Out with like-minded people. And this is the best spot to connect with people of a certain caliber. And we vet every single person that comes through. So if people are— even though they make a lot of money, but their character, we don't really align with that, we're not necessarily going to let them in. We do this event in Beverly Hills, and it's happening in the beginning of August. All you have to do to learn more about it is just go to levelingup.com/founders. Again, it's levelingup.com/founders if you want to hang out with amazing people. Neil, My podcast co-host is going to be there. I'm going to be there. People like Syed Balkhi, he will be there as well. And again, it's going to be a great time. levelingup.com/founders to learn more, and we'll see you inside.

So it's funny, maybe like 6 months ago, someone pitched me, okay? Uh, someone who works at one of my companies, and they pitched me. They're like, we think we should only have 4-day work weeks, no more 5 days. And I was like, okay. And I wanted to hear the argument for it. Right? And they're just like, look, you know, we want more time to travel, have fun, all these kind of things. And I was like, okay, what happens with pay? They're like, well, you keep the pay the same. And then I'm like, what happens to the output? They're like, well, we would produce roughly 1 day's less work. But I'm like, but you said you're going to be more efficient. And they're like, we'll be more efficient with our time the days we work. So maybe, you know, you don't lose a day's worth of work. Maybe you lose like half a day. I was like, all right, but we have paying customers who we promised a certain amount of work to for, you know, a certain amount. And like, yeah, just hire more people. And I was like, but if the economy's bad, all right, and losing customers, because a lot of businesses have lost customers. And I'm like, this means I'm just going to have to fire people. So I'm like, so what happens if I have to fire you? Oh no, no, no, you can't make that change. I was like, It doesn't work both ways. I'm open to hearing solutions. If someone can tell me how we can pay people the same and they can get the same amount of output done in 4 days instead of 5, I'm all for, you know, different creative solutions. It could be different days where people are picking their 4 days so you have coverage from Monday through Friday, right? Because some people may take Monday off, some people may take Friday off or Wednesday, or you pick a random day. But it's funny is there's consequences with everything. You know, there's also consequences of not giving people raises. They can end up leaving to another corporation and then you got to backfill and you could have upset customers and you can get churn from that and lose revenue, right? There's pros and cons of a lot of things, but it's funny where a lot of people will pitch stuff or just make changes and it can end up backfiring. Like a great example of this is Eric and I live in Los Angeles. Right? And they passed this thing called a mansion tax, where if your home is worth more than $5 million, you pay, I think, 4-point-something percent. If it's $10 million or more, I think the percentage goes to 5.5%. It's either 5% or 5.5% that you just give the city, whether you lose money or make money. And the goal with this money is to use that money to help solve homelessness, which is great if we can solve homelessness. You know, I'm, I'm, I personally would be willing to even get more tax, a bit more than that, right? But what's funny is everyone who was running for mayor said, do not vote for it. Didn't matter what side of the political arena they were, to the left and the right, and people still voted for it. And then we had massive complaints after of people saying, oh, my rent for my place is starting to go up. This sucks. This isn't cool. Well, the buildings that are worth typically more than $10 million are apartment complexes. So if these apartment complexes have to pay more taxes and they're losing money, what are they doing? They're passing it on to the people who voted for it because they're like, yeah, tax them. And then what ends up happening? They're like, wait, this isn't cool. You guys raised the price of my rent. And it's just funny. There's pros and cons to a lot of things, but a lot of people don't think about the consequences.

There's a quote I like and I have one of his books right next to me over here. His name's Thomas Sowell and he's an economist. You can call him a philosopher. He's African American. And actually the book title I have here is called Social Justice Fallacies written by him. So that's a whole separate thing. But a quote that he says quite a bit is, there are no solutions, only trade-offs. And that's exactly what Neil is saying. There's trade-offs to everything. There's no perfect solution to anything.

Right.

And so, the only thing that you can really control is your effort and you can't really even control your outcome. But the problem is most people, yes, most people don't think about consequences and most people like to blame other people because they don't want to take responsibility, right? And so, the problem with successful people, by the way, I don't know about you, Neil, but when I was younger, I did used to be like, oh yeah, the rich are so lucky. Yeah, they should pay more, right? But then, as I get older and maybe you do too, I'm just like, the problem is successful people tend to hold up a mirror to other people and then people just don't want to take responsibility for the things, the opportunities that they might have missed, right? So, we don't want to make this a philosophical podcast. I think we can move on from this. One thing I want to share on the 4-day workweek real quick, I worked at a startup. We did a 4-day workweek. Do you remember that?

Which startup?

The now defunct startup. It's gone now. But we did 4 days a week. We raised from A-list investors. We had Reid Hoffman, we had Mark Suster, we had Treehouse. Yeah. Treehouse, Yappity, all these people, right? And it was like, okay, we're working 4 days a week. Guess what? How many days do you think I worked?

You ended up working 6 or 7?

I worked 7 days a week, okay? So, we were in the middle of trying to save the company because we're about to— we had like 3 months of cash left in the bank. And I was told— I was in the company for a month. It was like, oh, if I don't hit numbers next month, I'm going to be fired. And I'm like, okay. So, what did I have to do? Had to learn everything on my own, had to study all these things, right? So, who ended up bearing the cost? I was part of the team that had to bear the cost, right? And also, guess what happened? In a year, oh, the investors are like, you know, I think it's very naive that you guys do a 4-day workweek. Couldn't raise money anymore. What had to happen? Oh, change to 5-day workweek. Guess what happened? Everyone got pissed. Everyone. And so, when you do something like that, It's very hard to roll back too.

It is really hard to roll back. But yeah, it's not everyone thinks about consequences, you know, and there's countless examples that you and I have for this. But what can you do?

I do think the workweek is going to cut down, but that's probably over like the next 10, 20, 30 years or so as we have more and more of these, of these agentic workflows, these agents coming into play. But go ahead.

I personally don't think the work is going to get cut down. I think people are going to lose jobs and their agents are going to make the people who are working more efficient.

All right, I'll bet you a Chick-fil-A.

Okay, sounds good to that. Make sure you go to marketingschool.io/agency.

That's right. That's right. See, even with Neil's jet lag, he remembers it. All right, that's it for everyone. Please don't forget to rate, review, subscribe as well, and we'll catch you later.