California $20 Fast-Food Wage Hike Cuts 18,000 Jobs

California's 2024 law raising the minimum wage for fast-food workers from $16 to $20 per hour has resulted in significant consequences for employment in the sector. Studies, including a National Bureau of Economic Research (NBER) working paper, found that while wages increased by about 8 percent, fast-food employment in California declined by approximately 2.7 to 3.2 percent, equating to roughly 18,000 lost jobs compared to national trends. This decline occurred despite previous growth in the state's fast-food employment and was accompanied by widespread reductions in worker hours and benefits, affecting 89 percent and 35 percent of workers respectively. The wage hike also triggered notable price increases at major chains, which disproportionately impact low-income consumers who rely heavily on fast food. Economists estimate employment elasticities that suggest the job losses are a direct response to the wage increase, with concerns raised about longer-term shifts towards automation. Overall, the policy has sparked debate about the efficacy of targeted minimum wage increases, highlighting trade-offs between higher pay and job availability in the fast-food industry.