California’s latest attempt at progressive policy has resulted in a significant loss of jobs. The state’s new $20 fast-food minimum wage law has reportedly cost nearly 18,000 jobs, according to a study from the National Bureau of Economic Research. Researchers Jeffrey Clemens, Olivia Edwards, and Jonathan Meer found a 3.2 percent drop in fast food jobs in California after AB 1228 was enforced.
“Our median estimate translates into a loss of 18,000 jobs in California’s fast-food sector relative to the counterfactual,” the researchers stated. This outcome sharply contrasts with the goal of supporting low-income workers. The law, enacted in September 2023 and signed by Governor Gavin Newsom, formed a “Fast Food Council” to dictate wages and work conditions in the sector.
As Fox Business highlighted, the law mandates a $20 hourly minimum wage for fast-food employees starting April 2024. Meanwhile, fast-food employment in other states saw a minor increase of 0.10 percent. Before the law, California’s fast-food employment mirrored national trends.
California’s consistent track record of inefficiency is evident in various sectors. From a rail project that leads to nowhere to dry fire hydrants during wildfire seasons, the state government frequently mismanages resources. Governor Gavin Newsom’s latest policy has not only hindered the fast-food industry but also increased costs.
In April, an encounter at a Wendy’s in Hollywood illustrated the impact of the wage hike. The employee seemed more interested in his phone than serving customers. This is the fallout of a $20 minimum wage.
The Wall Street Journal editorial board labeled the policy as “magical thinking,” a sentiment echoed by Fox Business. Rachel Greszler from The Heritage Foundation concurs, stating, “Wage controls never work.” She emphasizes that while lawmakers can set wages, they cannot eliminate the resulting consequences.
Greszler warns that the repercussions in the fast-food industry should serve as a cautionary tale. Particularly, she highlights Los Angeles’s decision to raise the minimum wage for hotel and airport workers to $30 by 2028. Governor Newsom’s office dismissed the study as flawed and biased.
However, the facts remain clear: thousands of former fast-food employees in California are now without jobs. This is the result of state lawmakers’ misguided intentions to increase earnings for these workers. The Western Journal originally published this analysis, shedding light on the unintended effects of California’s progressive policies.
