Federal data now shows California fast food employment is down 16,000 jobs since the passage of the state’s $20-per-hour fast food minimum wage last year.
A fast food study from the Berkeley Research Group found California fast food prices increased 14.5% from September 2023 to October 2024, or double the national average.
The U.S. Bureau of Labor Statistics’ quarterly employment survey covers 95% of American jobs, and is considered the gold standard for jobs and wage data. Now its latest report shows California fast food jobs declined from 570,909 in September 2023 to 554,748 in September 2024.
“Some advocates for the fast food minimum wage have already branded the 25% increase a success,” wrote BRG, whose research team included the former head of the state-funded Legislative Analyst’s Office. “According to them, not only have fast food workers received higher pay because of the increase, but the number of jobs available to these workers has increased as well. However, these claims are not supported by reliable data.”
The BRG report notes jobs declined in December 2023, which in this century only occurred during the Great Recession in 2009 and during the COVID-19 pandemic in 2020, and that employers have cut hours and benefits to offset wage increases.
According to California Gov. Gavin Newsom, that’s not happening, citing a UC Berkeley study.
“Consistent with recent minimum wage research, the findings challenge the outdated assumption that significant wage increases lead to job loss,” said the governor’s office in a statement on the study. “This study, the first to marshal systematic data and rigorous analysis, provides policymakers with a timely, evidence-based assessment of the policy’s effects on wages, employment and prices.”
However, the study compared notoriously seasonal fast food employment in January 2023 — during the winter season when there are fewer fast food workers — to July 2024 — in the peak summer hiring season.
It also used the monthly “Current Establishment Survey,” a BLS data set based on limited survey data. This data is often adjusted significantly after the fact due to its shortcomings that the state-funded Legislative Analyst’s Office had to create a hybrid measure to more accurately track employment.
“Since the middle of 2022, the monthly jobs reports have tended to overstate actual employment growth in the state,” said the LAO in January.
However, these challenges do not seem to be deterring the governor’s office, which shared optimism on the results spurring more minimum wages for more industries.
“California’s sectoral wage policy experiment is both large-scale and groundbreaking,” wrote the governor’s office. “If deemed successful, it could pave the way for similar policies in other states and industries.”
The state’s new health care sector minimum wage — which explicitly applies even to “gift shop” workers working in a hospital building — rose for hospitals to $23 per hour in October 2024 and will rise to $25 per hour in July 2024. Some providers get to pay lower rates, for now, with increases over time.
Early in 2024, Newsom’s office delayed the health care minimum wage from June to October to reduce state health care spending as the state faced a $73 billion deficit.
Newsom has since asked for a $3.4 billion bailout loan to cover rising Medi-Cal costs, which could, in part, be attributed to the rising cost of health care labor from the new wage.
