Fast food companies in California cut jobs in response to the state’s law raising minimum wage to $20 per hour according to a new study from the National Bureau of Economic Research.
California raised the minimum wage statewide for “fast food restaurant employees” to $20 per hour last April following the passage of a ballot proposition in September the year before.
Analysis of unadjusted data from the Quarterly Census of Employment and Wages, the NBER found “that employment in California’s fast food sector declined by 2.7 percent relative to employment in the fast food sector elsewhere in the United States from September 2023 through September 2024 … Our median estimate translates into a loss of 18,000 jobs in California’s fast food sector relative to the counterfactual.”
The fast food sector has also cut workers’ hour and increased automation to avoid paying rising employment costs.
The study also speculates that the state’s minimum wage law may have “led full-service restaurants to have more difficulty attracting workers, or that those employers anticipate future minimum wage increases in their sector as well.”
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