Arlington, VA – Today, the Employment Policies Institute (EPI) pointed to growing evidence that California’s $20 minimum wage law has cost jobs. This time, the evidence comes from an unexpected source: Researchers funded by the same union behind the $20 policy.
EPI has been a leading voice on the consequences of this law, releasing multiple reports based on government data that show the state’s $20 minimum wage is costing jobs. In an attempt to cover up these consequences, unions have supported biased researchers who are supportive of $20.
In their latest report, the union’s research team acknowledges a “negative employment effect” from the $20 minimum wage – which translates to some 4,000 jobs lost. While this figure is at the low end of what other data sources estimate, it is a shocking confirmation that the SEIU/Newsom $20 minimum wage law has hurt workers.
“Congratulations to the Berkeley team for coming to their senses and admitting the $20 wage law has cost jobs,” said Rebekah Paxton, research director at the Employment Policies Institute. “Their report acknowledges what everyone has been saying for over a year, and the Fast Food Council should act with caution before enacting further wage hikes.”
Key Takeaways From SEIU-Backed Report:
- They report’s author confirms that the wage law has resulted in lost jobs, saying:
- “Our difference-in-differences results suggest a very small (0.7 percent) negative employment effect.” (p. 8) This represents an estimated loss of roughly 4,000 jobs; while this is on the low-end of what government data shows is the likely negative impact, it still reflects a substantial blow to thousands of fast-food workers.
- The report then attempts to cover up these negative impacts of the law, by comparing declining employment in fast-food restaurants to declining employment in full-service restaurants.
- But full-service restaurants are also struggling under California’s onerous union-supported wage and labor mandates. Ironically, by comparing the decline of the two industries, the report shows the dual damage of a higher minimum wage.
- EPI accounted for this in its November 2024 report finding California’s fast food job losses are nearly four times steeper than total private employment growth for all industries in California during the same time frames.
- The report further dismisses restaurants’ proactive business adjustments–such as price hikes–as “implausible” (p. 11). This statement runs contrary to published reports.
- Restaurant operators and employees have repeatedly stated in the media, beginning in the Fall of 2023 after Gavin Newsom signed the $20 wage law and early 2024 in outlets like the Wall Street Journal, which reported businesses were raising prices, downsizing their staff, and shutting down in anticipation of the law’s effective date on April 1, 2024.
Facts about California’s Fast Food Crisis:
Job losses: The best federal data shows California has lost up to 6,166 (-1.1%) fast food restaurant jobs since the $20 minimum wage law was signed in September 2023.
- This reverses the previous year’s trend, which saw fast food jobs increase by 17,528 (3.1%).
- This also contrasts U.S. fast food job trends, which saw the nationwide industry increase jobs by +1.6%.
Price hikes: Restaurants affected by the $20 minimum wage law have reported they have adjusted prices to adapt to the new law for over a year now.
- Datassential, a restaurant and hospitality intelligence firm, recently released data showing fast food prices in California have also differentiated from other industries and national trends.
- California’s fast food prices rose at double the rate of other states since the $20 wage law went into effect.
- The number of menu items rising in price was five times higher than in other states ahead of the April 2024 implementation of the $20 wage.
History of the IRLE:
- 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 reports from IRLE researcher Michael Reich and the IRLE on the impacts of minimum wage hikes have been debunked by other academics and news outlets, including Forbes and Seattle Weekly.