Alameda County officials just hit the brakes on a proposal to raise the local minimum wage to $30 an hour. Rather than sending the measure directly to voters this November, the Board of Supervisors voted to delay it so the economic effects could be studied first. It’s a smart move considering the already well-documented negative effects of similar hikes right in their backyard.
Meanwhile in Sacramento, Governor Gavin Newsom doesn’t seem to be getting the picture. Last month, Newsom celebrated another scheduled increase to California’s minimum wage, which will rise 50 cents up to $17.40 per hour next year. His gleeful announcement ignores an important fact: the state’s annual increases over the last decade have already hurt California workers.
A recent Journal of Labor Economics study on minimum wage hikes like California’s that began in 2016 killed hundreds of thousands of jobs across the country, particularly for teens and lower-skilled workers.
Despite his promise to “stabilize” the industry and increase wages, Newsom’s latest $20 minimum wage in the fast food industry – implemented in April 2024 – pulled the rug out from under tens of thousands of workers and residents.
Government data and economist analysis shows the law slashed opportunities for local workers:
- Several analyses found that Newsom’s $20 fast food wage has resulted in tens of thousands of fewer jobs for affected fast food workers in the Golden State.
- Other EPI research found that employees who kept their job experienced reduced shift availability, amounting to nearly two months of lost work over the course of a year.
Local residents felt the pinch of sky-high wage mandates too. Another National Bureau of Economic Research study found that California’s $20 fast food wage mandate contributed to significantly higher food costs, with menu prices rising by 3.6% more than the rest of the country.
Instead of making life more affordable, Newsom’s $20 minimum wage law left Californians with fewer jobs, fewer hours, and higher prices.
These outcomes help explain why economists oppose large wage mandates like the one Newsom is celebrating. In EPI’s recent survey of 166 American economists, nearly 90 percent opposed policies like California’s. Eighty-nine percent said they expected such mandates to reduce employment, while 80% said they would increase the cost of living.
It’s no wonder why a majority of voters rejected a ballot measure to raise the California state minimum wage to $18 per hour back in 2024 – workers and residents were already living in the aftermath of steep wage hikes. Now, Alameda County officials have rightfully recognized that an unprecedented minimum wage deserves careful economic scrutiny before moving forward. Newsom should take note.
This sentiment is not isolated in California – lawmakers and hopefuls across the country in places like Connecticut, Florida, Pennsylvania, and Wisconsin are touting minimum wage hikes as a fix for mounting affordability concerns. But the Golden State should be a cautionary tale for lawmakers from coast to coast – in practice, minimum wage mandates increase the cost of living and eliminate opportunity for the workers they impact.