April 1 marked the two year anniversary of California’s harmful $20 fast food wage law. While government data shows the hike has cost the state tens of thousands of jobs and double-digit price hikes, UC Berkeley’s union-funded Institute for Research on Labor and Employment is back downplaying the impacts felt by Californians.
In the latest report, authors Michael Reich and Denis Sosinskiy claim California’s wage hike from $16 to $20 for fast food workers starting April 1, 2024 did not lower employment. But the analysis is rife with red flags:
- The introduction to the paper touts Governor Gavin Newsom’s misleading use of monthly preliminary job estimates, which are based on a small survey sample and are routinely revised after the fact. His claims that California was adding jobs were debunked by the Quarterly Census of Employment and Wages (QCEW) – which found California had lost tens of thousands of jobs a year after the law. (p2) The report looks at “the policy in its first year,” (p3) but even more recent data confirms regardless of peak times of year – every month has lower fast food employment than a year before since before the law was signed by Governor Newsom in September 2023.
- It uses imprecise cell phone location data as a second claim that California’s wage hike did not cause employment losses. The authors cite something called ADVAN data, comprised of users who opt into cell phone tracking, and tracks the frequency of these users spending four or more hours in the vicinity of a fast food restaurant. There are significant issues with pinpointing foot traffic at a desired location, which can be lumped in with other nearby locations due to ADVAN’s system for mapping geographic data. This makes it difficult to tell what foot traffic can be attributed to a fast food restaurant versus another nearby business. This has been found to be the case in places like strip malls, which typically include fast food restaurants. (p9)
- Data mapping issues aside, the ADVAN data has other problems: Users cannot take into account the reason for visiting a particular location or business, and while customers would be less likely to stay at a fast food restaurant for four hours, it is impossible to differentiate, for example, a student utilizing free wifi and ready-made food for an extended study session from an employee on shift. It would also be impossible to differentiate employees affected by the $20 wage hike versus managers and employees on other pay scales. (p9)
- It continues to use UberEats platform as a proxy for brick-and-mortar restaurant prices. As detailed in a previous EPI report, UberEats pricing is often different from store pricing for customers, including app commission fees, peak pricing, and restaurants adjusting prices to account for these extra factors. Therefore, it is unclear how prices from the platform respond to economic or policy changes. In addition, it excludes any restaurant that does not use third-party apps like UberEats – which could range from smaller chains to In-N-Out (as noted by the authors). (p10) As an example, see below the price of ordering a Starbucks Cold Brew on the Uber Eats app (before fees) and on the Starbucks app for the same location:
Reich and Sosinskiy continue to argue that California’s $20 minimum wage has not caused employment losses or substantial price increases passed on to customers. Yet a mountain of economic evidence suggests otherwise.
A National Bureau of Economic Research paper in July 2025 found the law had slashed more than 18,000 fast food jobs. In their latest installment, Reich and Sosinskiy attempt to downplay this finding, saying this conclusion isn’t valid because the full-service industry has seen employment fall. Previous EPI analysis shows California’s full-service restaurant industry has also been stunted by the state’s overall minimum wage – one of the highest in the nation with no tip credit. Yet the rate of employment losses has been largest in fast food since the $20 law began. In fact by the end of 2025, EPI found California’s lost jobs totalled almost 20,000. Another EPI analysis of U.S. Census Bureau data found the median California fast food employee lost 7 weeks of scheduled work hours after the $20 wage went into place.
There is significant evidence that prices rose significantly too. Another recent National Bureau of Economic Research report found that in less than a year under the $20 wage law, fast food prices rose as much as 3.6% compared to other areas across the country. That data comes from the government-reported Consumer Price Index. The California-based Berkeley Research Group finds local prices have risen as high as 14.5%.
Another researcher at UC Santa Cruz came to the same conclusions after interviewing 100 fast food franchise locations after the law went into place across the state and analyzed their records. He found:
- Scheduled hours for workers declined;
- Overtime opportunities were eliminated;
- Automation is more rapidly replacing employee tasks;
- Menu prices rose; and
- Franchisees expect to close locations in the coming years.
It doesn’t take too much math to see the $20 fast food wage has backfired on California’s workers, restaurants, and residents.