CA Fast Food Jobs Drop by 16K as Wage Rises to $20, Debunking Newsom’s Study

(The Center Square) - According to federal data, California has seen a decrease of 16,000 fast-food industry jobs since implementing the statewide $20-an-hour minimum wage for fast food workers last year.

A study conducted by the Berkeley Research Group revealed Californian fast-food prices. increased 14.5% from September 2023 to October 2024, which is twice the national average.

The U.S. Bureau of Labor Statistics' quarterly employment survey encompasses 95% of American jobs and is regarded as the benchmark for job and salary information. The most recent report indicates that fast-food positions in California decreased from 570,909 in September 2023 to 554,748 in September 2024.

Some supporters of raising the fast-food minimum wage have labeled the 25% hike a victory," noted BRG, who had previously headed the state-sponsored Legislative Analyst’s Office within their research group. "They argue that this boost led to better wages for fast-food employees and also resulted in more job opportunities for such workers. Nonetheless, these assertions lack backing from solid evidence.

The BRG report indicates that employment decreased in December 2023, a situation that has happened this century solely during the Great Recession of 2009 and amid the COVID-19 pandemic in 2020. It also mentions that companies have reduced working hours and benefits as a counterbalance to rising wages.

Based on what California Governor Gavin Newsom stated, this isn’t occurring, pointing to research from UC Berkeley. study .

In line with recent studies on the minimum wage, the findings dispute the old belief that substantial raises result in job cuts," stated the governor’s office in a release about the report. "As this investigation marks the first effort to gather comprehensive data and conduct thorough analyses, it offers lawmakers a current, fact-driven evaluation of how the policy impacts wages, jobs, and costs."

Nevertheless, the research contrasted the typically fluctuating nature of fast-food industry jobs in January 2023 — a time within the winter months when staffing levels tend to be lower — with those observed in July 2024 — the height of the busy summer recruitment period.

It additionally relied on the monthly "Current Establishment Survey," a dataset from the BLS derived from restricted survey information. Due to this data's limitations, which required significant post-fact adjustments, the state-supported Legislative Analyst’s Office developed a combined metric for a more precise tracking of employment.

"Starting from mid-2022, the monthly job reports have generally overstated the actual increase in employment within the state," stated the LAO in January.

Nevertheless, these obstacles do not appear to be discouraging the governor’s office, which expressed hopefulness about the outcomes prompting higher minimum wages across additional sectors.

“The experimental sectoral wage policy in California is both extensive and innovative,” stated the governor’s office. “Should it prove successful, this approach might set a precedent for comparable measures in other states and sectors.”

The state’s newly implemented minimum wage for workers in the health care sector — which specifically applies Even employees at "gift shops" within hospital buildings saw their wages increase to $23 per hour in October 2024, rising further to $25 per hour in July 2024. However, some service providers currently have access to lower rates, though these will gradually go up over time.

In early 2024, Newsom’s office postponed the implementation of the health care minimum wage from June to October. This delay was aimed at decreasing state health care expenditures due to a $73 billion budget shortfall California was facing.

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.