California’s $20 food minimum wage hike cost approximately 18,000 jobs
The National Bureau of Economic Research (NBER) published a study that concluded what many here repeatedly argued. California’s $20 minimum wage for their fast-food industry resulted in the loss of approximately 18,000 jobs. The resulting reduction in California’s fast-food sector contrasts with the expansion of the food industry sector in the other parts of the U.S.
From Fox Business:
The research found that in the year since the bill went into law, California’s fast food employment contracted while fast food employment around the country expanded.
“Following AB 1228’s enactment, employment in the fast food sector in California fell substantially, with estimates ranging from 2.3 to 3.9 percent across specifications, even as employment in other sectors of the California economy tracked national trends,” the researchers stated, noting that employment in the same sector increased by around “0.10 percent” around the country.
The paper noted that prior to AB 1228 going into effect, California’s fast-food sector “was on a similar path as the rest of the United States prior to AB 1228’s enactment.”
Critics slammed the wage hike in the wake of the study.
In a column for The Daily Signal, The Heritage Foundation economic expert Rachel Greszler wrote, “When it comes to central planning, history keeps the receipts: Wage controls never work. That’s because policymakers can set wage laws, but they can’t outlaw the consequences.”
Greszler added, “The consequences of that wage hike on the fast-food industry should be a warning sign” for the city of Los Angeles in particular, after it recently voted to increase the minimum wage for hotel and airport workers to $30 by 2028.
The Wall Street Journal editorial board said Monday that the notion a substantial minimum wage hike helps the economy is “magical thinking.” It also criticized New York City mayoral candidates Andrew Cuomo and Zohran Mamdani for proposing similar wage hikes if elected.
Additional Reading:
Hays, G. (2025, July 26). Study shows that California’s $20 minimum wage hike cost state 18,000 jobs. Fox Business. Link.
Category: "Teh Stoopid", Democrats, Society
“loss of approximately 18,000 jobs”
That’s a lot of tax revenue. The democrat’s elixer!
That’s just jobs lost. What about hours cut because restaurant owners can’t afford to keep employees on the clock 8 hours a day at $20 an hour.
And don’t worry, companies that contributed to Gavin Newsom got an exemption. Who knew that Panera waa a bakery and not a restaurant?
I remember the Panera deal which I think started last year or the year before.
Around here, Panera’s spendy even without the minimum wage hikes.
Same here.
Ran across this, this morning.
Panera Bread Announces Major Layoffs Amid End Of Fresh Dough Production
Panera Bread is set to lay off hundreds of employees as it phases out fresh dough production across the United States. The company plans to permanently shut down all remaining fresh dough facilities nationwide within the next two years. This includes a production plant in Brentwood, Missouri, which is set to close by September 12, affecting 72 employees. This move follows a reported $5.2 million drop in sales and aims to transition Panera away from baking bread from scratch in its cafés. Under its new “on-demand” bread production model, third-party contractors will prepare and partially bake dough according to Panera’s recipes. This par-baked dough will then be frozen and shipped to cafés for final baking throughout the day, ensuring baked goods are more readily available for customers. Panera states affected employees will receive severance packages and outplacement services. The company expects this transition to enable the opening of more stores in locations previously inaccessible due to fresh dough delivery limitations. This strategic shift represents a significant change in Panera’s operational model over the past year.
Will there be more openings or closings in CALI
Demoncats don’t care. The “rich” have endless supplies of money that can be taxed. Plus, there are fees that they can be charged.
Not sure who eats fast food anymore. The industry has been in free fall for the last decade. 2019 approximately 36% of Americans consumed the garbage food daily. By 2023 that had dropped to 30% or by 20% in four years. The prices are ridiculous and the food is just bad.
If you can go to a cafeteria type restaurant like Cracker Barrel or Cheddars and get a better tasting meal for the same price it makes no sense to buy fast food.
I do remember when the oldest person who worked at McDonalds was about 26. Nobody actually thought it was a career path. Where people got it into their heads that running the deep fryer was career progression I have no idea.
“I can’t support my family on minimum wage.”
Neither can Hack. That is why he graduated High School, learned a marketable skill, owns his own home, owns his own car, has no debt and Credit Score of 835.
You forgot to add in that you are a prowd owner of the
famous Magic 8-Ball Hack..
He may own it outright, but he never mentions the cost of upgrades to keep it working in top form. Maybe he gets them free from the red hat software lady.
KP at Dix Basic was a good path for some.
Taco Bell used to be the fastest, cheapest food that you could buy. A couple of weeks ago, in a hurry, me, Blaster-6, and our youngest (16yo) stopped by TB to grab something quick. It was $34.00. We didn’t get anything extravagant either.
On our recent trip the GB clan had to use Taco Bell a couple of times to find some gluten-free options for two of the grandsons.
It wasn’t cheap, it wasn’t filling, and I wasn’t happy. It kept them alive, but dang I expected better.
A couple of stops by Wendy’s fared better. They have a baked-potato option that actually helped fill up the kiddos.
Mrs. GB & I are not much on eating out. Usually just for an anniversary, but it’s noticeably different.
You are mistaken. Dr. Pangloss assures us that inflation is minimal in this, the best of all possible economies, and certainly nothing to be concerned about.
The dems are currently accusing Trump of causing the inflation that we are still seeing.
Haven’t been to a fast food place in several years…. only eat my own food and drink my own coffee
I worked at McDonald’s twice; it was my first job at age 15 or so, and a few years later I took a part-time job there to hang out with a friend. This was the ’90s, and you’re right, even the managers were mostly college students just making some money until they graduated. The restaurant managers might have been “career” types in their 30s, but for the most part, no one considered the job to be anything more than a temporary gig until they graduated high school and/or college.
Apparently KaIifornication/Los Angeles is too stoopid to remember the same lesson from Washington (state)/Seattle.
Raise minimum wage, lose jobs.
I remember there was talk of installing “robots” at fast food places. How far along did that get?
The McDonalds local to me all went to self-order kiosks instead of manned registers within a year of MA mandating a $15/hr minimum wage.
The VFW Bar & Grill I was a board member of was forced to close and make one full time and five part time bartenders unemployed and making $Zero instead of making $9/hr plus tips when MA upped minimum to $12/hr on the way to $15.
Dems care more about the campaign contributions from unions trying to unionize restaurants
$30/hr in LA is still poverty level considering their cost of living.
I couldn’t afford the house I sold in Orange County now unless I was making $350k/yr, assuming mortgage, taxes, and insurance was standard 28 percent of gross income, and I’d still basically be house poor.
I recall a commenter here who always claimed that California had one of the best economies in the world. He’s wrong. Imagine that.
In terms of GDP, it is, but look what it costs to maintain it. Then it ain’t such a rosy picture. Housing prices were stupid when I left. Nearly 20 years later, they’re absolutely batshit crazy.
My dad was stationed at March AFB in the 60’s. Retired in ‘68. Just as soon as my sister graduated HS, we ran for Idaho. Best thing that ever happened to my 6 year old self.
I just looked at houses where I used to live in Arlington, Va. in the 1960s. They all now seem to be $1,000,000+, and these were not new when I lived there, nor were they in an expensive area. I saw one rental, an old 3 Bdrm 2600 sq. ft. house, for $4,500/month.
Wow! I just finished paying off my house (YAY ME!). About the same size, standard lot (~1/4 acre). Mortgage was about $1200/mo at the end. Kept increasing due to creeping property taxes.
Then again, this is in a suburb of SLC UT. Far from DC, LA, or Sham Fran.
Real estate is going nowhere but up. As the saying goes, they aren’t making any more land—-but they sure are making more people.
I’ve commented on the CA economy many times.
The “4th largest economy in the world” should be able to fund its own choo-choo train.
Their train is the 4th most expensive infrastructure project in the history of the entire world.
Like I mentioned on the site last week or the week before, my brain must be getting week in forgetting which week it was so I will get off of the tangent and say that if Kalifornia got off on the right track, they would have had the track line set up. Hard to keep track of these things. See you later Alligator.
Bostonians are glad that something has surpassed the cost of their infamous big dig project.
And the fed reserve are trying to knock California’s high speed rail off its most expensive project pedestal.
Ah, yes, the Fed. What a splendid job they are doing maintaining the value of our currency. Do not begrudge those fine folks, experts in their field, a few well-earned “perks”.
How many people in Cali said “YES, I’m making $20.00 an hour now!!! Wait, What? What do you mean I’m fired?”
Or; “I only have to work 5 hours a week? That’s GREAT….um…..”
Like the farm laborers who must’ve thought they would be bringing in the dough in those states that mandated OT for ag work, now have to be content with a 40 hour week.
Who wants a shitty burger with cold fries. And that kind of job is not meant to support a family. It’s a starter job for young adults. So getting rid of the slack workers was expected. It’s kaliporna and the idiots are trying to raise a family off a min wage job. Gov newscum is such a prize with programs that make the poor even poorer. So now the newly unemployed workers can get welfare.
I have to deal with tags about “known to California” warnings.
There is so much that California blatantly doesn’t know, the warnings are laughable.
I wonder how much trash is generated by manufacturers having to put those “known to California” things on everything.
Bunch of idiots.
But will they learn?
I thought it was $25 an hour unless your restaurant bakes bread, then it is $20 an hour.
Anything below $1,000.00/hr is an insult to the working families of America.
There is a little thing they teach in Econ 101 called “Supply and Demand”.
California‘s max unemployment rate is $450/week, barely equivalent to $11/hour.
The tax for that comes from the employer, yet the payments are below survival level according to the leftists in charge of administering that system in California.
The Kalipornia way to figure wages, you earn $800 and they deduct taxes. So you end with the net amount of $450.
So in a real world pay the workers are still getting the same wage as before the minimum wage hike. The state up their tax rate to cover the cost of the increase… it’s a kaliporna thing to make sure the poor qualify for welfare.
$20/hr. is more than my base rate of pay. Even though I’m on the one-man trucks most of the time now, I only make a couple dollars more an hour. Granted, I’m in Louisiana, and overtime isn’t an issue (probably one of the reasons we don’t get paid more). And… damn, I just looked it up, and my company starts at only $21.50/hr. in Montebello, CA, and $22.50 in Sacramento. So, while I service the McDonald’s, Taco Bells, Pizza Huts, Wendys, and Sonics down here, making more than most of the managers, my peers in CA are risking their lives to make little more than the 16-year-old new hires.
The service and retail industries have to balance out their payroll and profits one way or another. Either prices go up or employees are terminated or have their hours cut. The Big Macs I made cost considerably less than they do now. But I was making $4.25/hr. at the time. Gas was still regularly $0.85/gal., though, so everything cost less. Still, when wages are artificially inflated beyond the ability of companies to support them, something has to give.
I have a feeling that wages for my job are purposely kept on the lower side. The average workday is 10-14 hours, so we easily get 50+ hours a week, but like many delivery companies, our routes dictate our work hours (and the company’s earning). Bass Pro, on the other hand, made sure that full-time employees were aware of the no overtime policy, while part-timers found their hours cut after Johnny Morris’ 50th anniversary pay raise (minimum set to $14/hr., with then-current employees getting an across-the-board $1/hr. raise).
One of the realities of private sector businesses is that we can’t operate in the red for all of eternity and just steal what we need to operate at gunpoint from a captive audience. At some point we actually have to make more than it costs to be in business.
Replacing no skill jobs(understand that I mean no disrespect to anyone who works in an honest job, I simply mean those jobs where your replacement can learn what you know in less than a day) with automation is an initial capital investment, but with depreciation and no longer having to make payroll, SS, Medicare, unemployment contributions, etc…the automation becomes a realistic option when labor costs reach an unsustainable point for the business model.
Of course the other reality is that some food service and other low end labor related businesses like retail or personal services businesses never really had much of a business model for success to begin with, but as long as labor cost nothing they were moderately successful…once labor becomes a true cost center the product or services being offered have to actually be something unique or else the business fails.
90% of our employees are skilled labor and make well above that $20/hr and have for decades, but we manufacture products and provide services unique to our sector. It’s allowed us to continue growth for almost 40 years…for companies like this ( and there are lots of them ) $20/hr minimum is a non-issue.
Once again proving the reality regarding the necessity to obtain a skill set that provides value if one intends to enjoy what life potentially offers in these United States. Life is hard enough, it’s even harder when you lack skills and thus earn little to no money.
To quote Dean Wormer; “Fat, drunk, and stupid is no way to go through life son.”
It sure seems like Dems have a pathological fear of both history and economics as they continue the same old crap over and over and over again. Pander to people in the guise of “helping the common man” the results of which put “the common man” further and further in the hands / power of the dems.
This meme, while patently offensive, is also historically correct. I recall when this quote was revealed and very quickly went away in the press.