California’s $20 minimum wage for fast-food workers backfired
California’s Governor Gavin Newson signed a bill raising the minimum wage from $16.00 to $20.00. Newsom previously stated that this increase would help workers earn more given the increasing costs that people faced. However, A Berkeley Research Group’s study discovered that the outcome turned out in a way that many commenters here suspected. Instead of fast-food workers being able to mitigate inflation pressures with their pay increases, employers reduced working hours, removed overtime, ended employee benefits, and increased menu prices. Employers were also quick to utilize automation in their operations.
From Fox News:
“The results indicate a plethora of negative outcomes such as higher menu prices for consumers, reductions in employee working hours, widespread elimination of overtime and loss of benefits for employees,” said Stephen Owen, an economics lecturer, University of California, Santa Cruz.
“Further decreases in employee opportunities are being driven by automation and the adoption of labor replacement technologies is accelerating.”
The report came after a Berkeley Research Group study discovered not only were there 10,700 jobs lost between June 2023 and June 2024 in the sector, according to Bureau of Labor Statistics data. The prices at the establishments soared by 14.5% after the new minimum wage became law.
Despite the findings, California officials doubled down on minimum wage laws.
A phased-in minimum wage hike in Los Angeles mandated up to $30 per hour for airport and hotel workers. The law was signed into law last year by Mayor Karen Bass, mandating that their hourly wage must be raised by $2.50 each year until they reach $30 in 2028.
The Hotel Association of Los Angeles (HALA) recently commissioned a study that found hotels have eliminated or expect to eliminate 6% of positions, roughly 650 jobs, since the Hotel Worker Minimum Wage Ordinance took effect in September.
While these laws raise concern from business owners, advocates in Oakland, California are pushing for a $30 minimum wage.
On the East Coast, the city council in New York City is weighing a proposal to boost the minimum wage to up to $30 — a move that newly elected Mayor Zohran Mamdani signaled that he would sign on the campaign trail — causing consternation among the business community.
Additional Reading:
Nelson, J. Q. (2026, April 7). California’s $20 minimum wage for fast-food workers led to ‘negative outcomes,’ researchers say. Fox News. Link.
Category: "Teh Stoopid", Democrats, Society
I can’t understand, how the democrats can’t understand!! It’s common sense. I know that common sense is not common, especially with the left, but at some point, common sense has got to take over. Right?
Newsom’s aide: “Sir, costs have gone up again. It almost looks like the republicans were right.”
Newsom: “I told you to call me ‘hands,’ not Sir. What’s this about costs?” *waves hands independently of body or speech*
Aide: “sir, I mean ‘hands,’ the Repubs are saying your previous policy decisions drove up the costs of doing business and people are getting fi…”
Newsom: “Never mind. Work up legislation raising wages, get a new tax on gas, and find me an angle by which I can blame Trump. I need that before I get on a plane to a red state where I can complain about Trump while ignoring our state’s failures.”
I used to go to micky dees, buy a burger, fries and a soda pop for one dollar and get change back….These fast food joints are supposed to be a stepping stone to get to a better pay job but for $30.00 bucks an hour,and heavens to Betsy, I’d sling hash for that..
Later Alligator
Apparently no one can learn some someone else’s past experience.
Didn’t Seattle go through this a few years ago?
I know, I know, “But they didn’t do it right. We’ll get it right this time”. (said every communist ever)
Yet, the California government pay scale starts at $16.90 an hour. They should go ahead and raise that to $30 and hour and then double taxes to pay for it.
California seems to think that McDonalds owners have a 32% net profit margin. This is not true. Corporate does but 95% of the stores are owned by franchise. There the net margin is around 10% on average.