(The Center Square) – Earlier this year, national media organizations and The Center Square covered a fast food jobs apocalypse in California as the state anticipated a new fast food minimum wage of $20 an hour that went into effect in April. Now Gov. Gavin Newsom and his allies say it isn’t true. Fast food employment is actually growing.
What’s going on?
It started when Stanford’s conservative Hoover Institution reported the job losses at 9,500 from last fall to January of this year along with new automation, rising prices and service cutbacks amid California’s nation-leading high unemployment rate. Anecdotes like Rubio’s decision to close 48 stores, seemed to back that up
Now, California Democrats cite new Bureau of Labor Statistics data that show employment in the fast food industry grew by 10,600 from March through May of 2024, a stark contrast with the gim numbers reported by Hoover.
Tom Manzo, founder of the California Business & Industry Alliance which ran an ad targeting Newsom which featured Hoover’s research, stands by his concerns.
“Newsom has no shame. Our ad used an analysis from Stanford, which looked at job loss since last fall. Critics of the ad, including the governor’s allies, said we should have used seasonally adjusted data. Well, the latest seasonally adjusted data available came out … and it shows California actually lost 2,500 fast food jobs since January. Governor Newsom’s bad policy remains indefensible, and workers and businesses are suffering for it,” Manzo told The Center Square in an email.
In any case, 2,500 job losses is far fewer than 9,500 Stanford originally reported.
The Center Square’s analysis looks at the data still another way. Fast food job growth from May 2022 to May 2023, before the minimum wage law was passed, was 19,100 jobs according to BLS. From May 2023 to May 2024, covering the period when the law was passed and went into effect, jobs grew by only 3,000.
If you predicted job growth to be the same before and after the minimum wage law went into effect, there are 16,000 fewer jobs today than you expected. Even if jobs are still growing, that is a big effect.
In any case, a 3,000 jobs increase is still an increase.
Whatever the numbers, Newsom stood by the legislature’s decision to raise the fast food minimum wage in his State of the State speech, arguing “We are a state that gives a damn about fast food workers – who are predominantly women – working two and a half jobs to get by. Because of the leadership of California’s Legislature, these hard workers finally got the raise and job security they deserved.”
