It’s been a Terrible, Horrible, No Good, Very Bad week for California Governor Gavin Newsom. After hanging his hat on the $20 minimum wage being a “good” thing for his state, EPI and local news outlets slammed him for lies about job losses as a result of the new law.
The AB 1228 law, which was signed in September 2023 and went into effect in April 2024, has spiked menu prices, slashed fast food industry jobs, and shuttered local restaurants. All the while, Governor Gavin Newsom continues to claim the law has been a “win-win-win” for his state.
So if it’s been such a good experience, why is his communications team pushing media outlets to hide data showing the opposite?
Let’s break down the timeline of evidence:
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September 28th, 2023, Governor Gavin Newsom signs AB 1228, to create a $20 minimum wage for fast food restaurants.
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November 2023 – March 2024, State and national media headlines highlight early woes of the $20 minimum wage, including layoffs, price hikes, and restaurant closures.
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June 6th, California trade group CABIA runs ad in USA Today calling out 10,000 jobs lost from the policy. The Governor’s office freaks out and pushes back.
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June 10th, The California Globe publishes a story saying “Governor’s Office Gets Snarky With the Globe Over 10,000 Fast Food Jobs Lost.” EPI and CABIA show that jobs or job growth are still down regardless of how you slice the data.
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July 23rd, EPI releases its CA fast food operators survey, which shows 98% of businesses have raised menu prices, 89% have reduced employee hours, and 73% have limited shift pickup and overtime opportunities as a result of the $20 wage law.
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August 13th, EPI publishes analysis of monthly seasonally adjusted BLS data showing California’s fast food job losses are unique to the industry, and other states are not experiencing this downward trend.
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October 3rd, Newsom issued a press release on UC Berkeley Institute for Labor Research and Education (IRLE) study, calling $20 wage a “win-win-win”. Berkeley study has multiple issues but cites upcoming Bureau of Labor Statistics Quarterly Census of Employment and Wages (QCEW) data as gold standard.
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November 4th, EPI releases a policy brief on Berkeley study, systematically debunking the claims that the law has been a success.
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December 5th, EPI releases an analysis on QCEW data which finds over 6,000 fast food jobs were lost since the signing of the $20 minimum wage law in September 2023.
The Southern California News Group editorial board this week put it this way:
“Anyone with any economic understanding would understand that government-mandated wage increases at fast-food restaurants would reduce the number of jobs and drive up the price of burgers, fries and pizza.
Sure enough, the latest data shows that after Gov. Gavin Newsom signed a union-backed law increasing wages by 25% to $20 an hour, the number of fast-food jobs has plummeted…”
“…Newsom and legislative Democrats can spin this any way they choose, but government mandates cost jobs and raise prices. They should at least own their own policies.”