Did California's fast food minimum wage reduce employment?

…the California minimum wage?

Never having to deal with a member of the public inside your property is a huge liability and hence stress reducer.

The cost of employment is not comparable to the cost of a particular good. Employment has much more complicated implications on the economy and on society. A minimum wage is set in part to prevent a desperate race to the bottom, and to (try to) ensure something approaching a living wage. It’s a blunt and often ineffective tool, but viable alternatives are scant. The free market won’t solve this one any more than it solves the problem of healthcare.

There used to be many grocery and liquor stores that you handed in a list of what you wanted at the counter and the staff collected it for you from behind the counter. With the way stores are locking up items it seems like we're steadily returning to that era.

No, you don’t understand. If the government hadn’t been involved, private organizations would have kept employees around even when cheaper alternatives exist.

This is sarcastic of course. Ideally if our economy distributed rewards across all of society everyone would be for changes like this if they did actually speed up automation

Its not at all imo. Franchised businesses are not in the habit of employing low skill workers as a public service. This data is interacting with both covid effects and infrastructure upgrade/rollover - in other words, it takes a while for companies to adopt affordable touch screen ordering systems and its been phased in at a ton of non-fast food (at least in my area) over the same period of time. Local health grocery store has touch screen ordering at their deli, as well as simultaneously going cashless. Most coffee shops too. Look at most international airports - almost all the kiosks have one or no attendants now.

The causality is raising the minimum wage pushed business to do this sooner rather than later. this is why, as per the study, California lost more jobs than states that didn’t raise the minimum wage

There’s almost always still a parking lot because of zoning laws, so you can eat in your car while parked.

At home in front of the television while scrolling their phone

The owner isn't neglecting it, it's a tragedy of the commons.

If the owner was to overhire, it might reduce the homeless population a little, but at great cost. And other businesses nearby will benefit for free.

Only large coordination at the level of state or national government can afford to implement welfare as a real investment in their citizens. If you do it at the city, county, or corporate level, it's just charity.

Is your usual breakfast spot a location with more than 60 locations? The minimum wage increase here only applied to chains with more than 60 locations. A lot of what you're describing is nation-wide. Food is more expensive everywhere. Cost of living in California is up significantly. Rents for restaurants is significantly higher as well (at least anecdotally, my wife's family restaurant has to close because they doubled the rent after their lease was up, I have heard this is incredible common).

This study by UC Berkeley attributed a 3.7% increase in food price because of the minimum wage changes. It's quite likely that food overall getting more expensive is responsible for a lot of what you're seeing.

If we can't afford to pay people in California a wage where they can live here, then maybe the economy overall isn't sustainable? A $20 minimum wage is like $2800 take home per month and in many places that can barely cover rent.

> I've noticed reduced hours, reduced staff, and increased prices.

That's not exclusive to California - my state didn't have a similar minimum wage law but they have the same changes in their restaurants.

The bad news is, I basically stopped going out because I couldn't rely on businesses being open when I wanted to go.

The good news is, I've lost a lot of weight from not going out.

I can imagine someone using similar arguments circa 1870, to complain how the abolition of slavery was a failure, and a scourge for the economy.

Was your normal breakfast spot subject to AB 1228 regulations?

Is your normal breakfast spot a fast food joint? If it is not, it is my understanding that is not affected by the "higher minimum wages for fast food workers" regulation.

If it is a fast food joint... well, I can't speak for all of California, but the fast food places in the section of San Francisco that I live (and roam around) in seem to have a reasonably healthy amount of customers in them.

Perhaps things are different where you are, but I've noticed food getting markedly more expensive, have heard of commercial rents getting higher and higher, and have heard that many of the folks who would have done waitstaff jobs have decided to fuck off for places that were (at the time, if not now) less expensive than California. Oh, and there was the whole "flight from the expensive cities because WFH means that many folks don't have to tie themselves to an expensive, small apartment in a city they don't really like" thing a while back that gutted the downtowns (and leisure districts) of some-to-many big cities because -like- many folks exercised their new option to leave and left.

Were it me, I'd consider blaming factors like those before I blamed modest increases in wages.

This only makes sense if staffing is a major cost factor, which it isn't.

You need to factor rent increases into your thinking, both commercial and residential. Your breakfast spot is a business that no longer makes financial sense to operate.

Feed the location of a business into a trip planner and note every neighborhood within reasonable commute radius. Calculate the average cost of renting a room in these areas and then multiply by three. That's your de facto minimum wage because you have no applicant pool beneath it.

Adding on to this, your competitors in a better financial position are all paying well above minimum. There's probably a McDonalds across the street starting people at five bucks an hour more than you, and they have that wage plastered on a banner right out front.

If it's actually only a 2.7% decline in employment relative to baseline then the increase in total wages paid would have to be very small to make this a bad policy.

I agree that a lost job should carry some kind of premium compared to a total increase in wages paid, and you also have to go and look at the total hours worked to get a good picture, but if the total relative increase in remuneration was higher than about 10% or so I think that's probably enough to be able to hand wave the employment decrease.

If it only turns out to be 5% I'd be a bit iffier about it.

In the UK we have a pretty generous minimum wage (for over 21s), I think even relative to $20 in California, and the effect on employment has been very small while minimum wage jobs now give a pretty OK life, so I'm inclined to support high minimum wages generally.

Also, you only really need to cover any increased taxes, everything else you pay them is someone else's income (fast food workers probably spend almost all their income). So your getting a big income increase to people very likely to spend it, this creating more employment.

Maybe here this will be offset by decreases in welfare program usage and the very, very high effective marginal tax rates that creates.

Indeed, the positive for increasing minimum wages is that it makes robotics and automation more cost effective.

With Silicon Valley being in California, one might think this is done on purpose—favoring the automation sector over the wage holders.

Once these companies get some scale in California, they can then drive prices lower to be competitive in other states.

In the end, sacrificing minimum wage workers in California will lead to (generally California based) automation companies taking this revenue across the country.

If the total salary has gone up, for less work done, it is a positive change. You can solve the inequal distribution via taxes and benefits.

Start: 100 people paid $100

After minimum wage change: 90 people paid $125, 10 people paid $0

After tax increase: 90 people paid $113 + $12 taxes, 10 people paid $108 from taxes

Now everyone is paid at least as much as they were before, and fewer people are forced to perform labour

In practice it was only 3% unemployment not 10%, which means the tax increase is less and there is more of an incentive to continue working. You can also pay the displaced workers less than their original wage, to reach an equilibrium where everyone is happy with either work+more money, or leisure+less money. Or have it be age-based with an earlier retirement. Or have people work part-time.

We need to stop seeing having a job as being inherently good. Being able to live is good. Humanity should strive for 100% unemployment.

Also consider non linear utility of money.

They are working the same hours elsewhere for free?

Why not set very low maximum wage ceilings and have 100% employment? /s

Correct?

Nah, they didn't lose them, they got employed elsewhere for what they are worth, so if we do random calculations, it was probably something like 25% increase for many of them.

The unemployment statistics were not influenced by raising the minimum wage here, so you can assume that the people who lost their low paid jobs simply moved elsewhere and got better paid jobs. It's mostly the employers' loss, which is how it should be. If you can't afford to start a business, don't start a business.

These 18,000 are most likely employed somewhere else at 20-25% wage increase. Note that a different study didn't see a rise in unemployment: https://www.nbcbayarea.com/investigations/california-minimum... which means that these people affected actually got a better living standard.

California created nearly one in five of the nation’s new jobs - https://www.gov.ca.gov/2024/08/16/california-created-nearly-... - August 16th, 2024

> California’s job expansion has continued into its 51st month, with Governor Gavin Newsom announcing that the state created 21,100 new jobs in July. Fast food jobs also continued to rise, exceeding 750,000 jobs for the first time in California history.

> “Our steady, consistent job growth in recent months highlights the strength of California’s economy – still the 5th largest in the entire world. Just this year, the state has created 126,500 jobs – solid growth by any measure.”

This is slightly out of date; California is now the world’s fourth largest economy as of April 2025, passing Japan. I assert the data shows the state does not have a job creation issue.

https://www.gov.ca.gov/2025/04/23/california-is-now-the-4th-...

That's the virtue of the pricing system! The invisible hand means if wages are low in particular profession, it encourages looking elsewhere, particularly in professions in short supply, whose wages will be high.

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"Decades of relentless propaganda" also known as the "the 20th century"

It's been a generation since minimum age workers were mostly high school kids.

Aside from really terrible home experiences for a tiny minority, a part time job for a 15 year old doesn’t need a “livable wage”

We don’t need kids working in coal mines but we also don’t need to make it near impossible for them to get work experience at a part time job because their skill level doesn’t align with $20/hr.

Didn’t want to often can mean cannot. Many of those businesses would go bankrupt. Also some people who may have started a business will now forgo that possibility.

Now, for many that’s okay. People just have to be okay that that happens.

Also, now those people affected have no wages.

> but the best that can be said is that it has no impact.

You're doing what you disavow here. If it doesn't affect the number of jobs, then it increases the value of that job. If you can sell a carrot for a dollar more, and still sell out of carrots, you have a increased the economic activity without increasing production. The same is true for hours.

This is not about increasing productivity. It's about increasing the share of that productivity that's paid out to workers.