Arlington, VA – Today, the Employment Policies Institute (EPI) released a new policy brief that systematically debunks arguments in a recent report from UC-Berkeley’s Institute for Research on Labor and Employment (IRLE). The EPI policy brief presents a multitude of evidence showing the negative impact of California’s $20 fast food minimum wage, right before California tallies votes for another statewide wage hike from $16 to $18 per hour.

The UC-Berkeley IRLE report uses convoluted data sources to claim the law has not hurt restaurants, employees or consumers, and uses misleading data that do not represent the restaurant industry or properly measure the impacts of the $20 wage law. The misguided claims run contrary to reports dating back to the fall of 2023 when the law was signed showing businesses began laying off workers, raising menu prices, and limiting worker hours in preparation for the wage hike.

“The $20 minimum wage has thrown a wrecking ball into the state’s fast food industry,” said Rebekah Paxton, research director at EPI. “Studies like this from UC-Berkeley use taxpayer funds to present a skewed economic landscape and mislead workers. The public is feeling the negative impacts of this law, and it’s time the government and Fast Food Council listen to workers before plowing ahead with additional wage increases in 2025.”

The full policy brief is available here.

Key Takeaways:

• IRLE’s claim that price increases have merely been “modest” relies on data from just two weeks prior and two weeks after the minimum wage hike took effect on April 1, 2024.  However, research reviewing from when the bill passed in September 2023 to its implementation in April 2024 found California’s fast food menu prices rose over 10%.
• Seasonally adjusted BLS data shows employment in the fast food industry is down by over 4,400 jobs since January, when businesses began announcing layoffs.
• When looking at employment changes from the most recent period (January-September 2024) since the end of last year, the fast food industry is the only sector that has experienced negative net job loss.
• Neighboring states Oregon and Nevada both experienced net increases in fast food jobs over the same period (January 2024 to the present).
• Early data from the Bureau of Labor Statistics Quarterly Census of Employment of Wages, which IRLE researchers claim is the “best universe” of data on this topic, confirm negative trends in employment for the months right before the law took effect.
• UC-Berkeley’s Institute for Research on Labor and Education (IRLE) is a taxpayer- and union-funded research lab, receiving millions per year in taxpayer dollars and union dollars.
• Previous research from Michael Reich and the IRLE on the impacts of minimum wage hikes has been debunked by other academics and news outlets, including Forbes and Seattle Weekly.