Latest news with #JeffreyClemens
New York Post
3 days ago
- Business
- New York Post
California's $20 minimum wage hike cost state 18,000 jobs, study shows
A new study published by the National Bureau of Economic Research (NBER) this month found that California's 2023 minimum wage hike cost the state thousands of jobs. Researchers found that the state's $20 minimum wage fast food hike has cost the fast-food sector 18,000 jobs since it went into effect in April 2024, representing a 3.2% decline in that sector compared to fast-food sectors in other parts of the country. Advertisement 'Our median estimate translates into a loss of 18,000 jobs in California's fast-food sector relative to the counterfactual,' researchers Jeffrey Clemens, Olivia Edwards, and Jonathan Meer wrote in their paper. The California assembly passed AB 1228 in Sept. 2023, which established the state's 'Fast Food Council' and its ability to set and adjust the sector's minimum wage. Additionally, the bill, signed into law by California Gov. Gavin Newsom the following April, established a new minimum wage for fast food workers, which was previously $16 an hour. 'The hourly minimum wage for fast food restaurant employees shall be twenty dollars ($20) per hour, effective April 1, 2024. Thereafter, the council may establish, pursuant to this subdivision, minimum wages for fast food restaurant employees that take effect on an annual basis, beginning on January 1, 2025,' text of the bill read. Advertisement 4 Workers advocate for a $20 minimum wage during a protest at the Kenneth Hahn Hall of Administration in Los Angeles on Nov. 1, 2022. Los Angeles Times via Getty Imag The research found that in the year since the bill went into law, California's fast food employment contracted while fast food employment around the country expanded. 'Following AB 1228's enactment, employment in the fast food sector in California fell substantially, with estimates ranging from 2.3 to 3.9 percent across specifications, even as employment in other sectors of the California economy tracked national trends,' the researchers stated, noting that employment in the same sector increased by around '0.10 percent' around the country. The paper noted that prior to AB 1228 going into effect, California's fast-food sector 'was on a similar path as the rest of the United States prior to AB 1228's enactment.' Advertisement Critics slammed the wage hike in the wake of the study. 4 California Gov. Gavin Newsom speaks to reporters in Sacramento, Calif. on July 25, 2025. AP In a column for The Daily Signal, The Heritage Foundation economic expert Rachel Greszler wrote, 'When it comes to central planning, history keeps the receipts: Wage controls never work. That's because policymakers can set wage laws, but they can't outlaw the consequences.' Greszler added, 'The consequences of that wage hike on the fast-food industry should be a warning sign' for the city of Los Angeles in particular, after it recently voted to increase the minimum wage for hotel and airport workers to $30 by 2028. Advertisement The Wall Street Journal editorial board said Monday that the notion a substantial minimum wage hike helps the economy is 'magical thinking.' It also criticized New York City mayoral candidates Andrew Cuomo and Zohran Mamdani for proposing similar wage hikes if elected. 'The Democratic Party's socialist nominee for New York mayor, Zohran Mamdani, has called for increasing the city's minimum wage to $30. Andrew Cuomo, his supposedly more moderate competitor, wants a $20 minimum. These guys will never learn because they don't want to see the world as it really is.' 4 McDonald's employees on strike rally for higher minimum wage in Los Angeles, Calif. on Nov. 29, 2016. Getty Images 4 An In-N-Out employee takes a drive-thru order in Los Angeles, Calif. on Sept. 28, 2023. ETIENNE LAURENT/EPA-EFE/Shutterstock Newsom's deputy director of communications Tara Gallegos disputed the findings of the piece, pointing out to Fox News Digital that the research paper was linked to the Hoover Institution, a public policy think tank she claimed has published 'false or misleading information' about California's minimum wage hike 'that later had to be completely retracted.' Gallegos also shared a San Francisco Chronicle article from Oct. 2024, which stated that the results of the wage hike 'defy a lot of the doom-and-gloom predictions made when Gov. Gavin Newsom signed AB1228 back in September 2023. Many of them originated with a survey conducted by the Employment Policies Institute, a think tank founded by a former restaurant industry lobbyist named Richard Berman — once described by TIME Magazine as 'the wage warrior' who 'has been publicly railing against the very idea of a minimum wage since at least the late 1980s.'' Additionally, the Newsom staffer cited a study from a UC Berkeley professor on the $20 wage hike from February, and pointed out several of its findings. Advertisement 'Workers covered by the policy saw wage increases of 8 to 9%, with no negative wage or employment effects on non-covered workers, she said, adding there were 'No negative effects on fast-food employment' and that 'The number of fast-food establishments grew faster in California than in the rest of the US.' She also pointed out, 'Menu prices increased by only an average of 1.5%—equivalent to about $0.06 cents on a $4 hamburger.' The Berkeley study looked at fast-food sector data from when the bill was enacted in April 2024 up until mid-Dec. 2024.
Daily Mail
4 days ago
- Business
- Daily Mail
California's minimum wage hike may have cost thousands of jobs
According to the economists behind the study, fast food employment in California dropped by 3.2 percent, while jobs in the same sector grew slightly across the rest of the U.S. 'Our median estimate translates into a loss of 18,000 jobs in California's fast–food sector relative to the counterfactual,' wrote researchers Jeffrey Clemens, Olivia Edwards, and Jonathan Meer. Before the law took effect, California's fast food industry was tracking the same employment trend as the rest of the country, the study found. But after AB 1228 was passed, the sector began to shrink. 'Following AB 1228's enactment, employment in the fast food sector in California fell substantially,' the paper states, citing declines 'even as employment in other sectors of the California economy tracked national trends'. Critics say the figures confirm what many feared: that a massive one–size–fits–all pay hike would push jobs out of reach for the workers it was meant to help. 'When it comes to central planning, history keeps the receipts: Wage controls never work,' wrote Heritage Foundation economist Rachel Greszler in a column reacting to the findings. 'That's because policymakers can set wage laws, but they can't outlaw the consequences.' She warned the law should serve as a wake–up call for other cities – especially Los Angeles, which recently voted to raise wages for hotel and airport workers to $30 an hour by 2028. 'The consequences of that wage hike on the fast–food industry should be a warning sign,' she said. The Wall Street Journal editorial board echoed that message, slamming politicians for 'magical thinking' around wage hikes. 'The Democratic Party's socialist nominee for New York mayor, Zohran Mamdani, has called for increasing the city's minimum wage to $30. Andrew Cuomo, his supposedly more moderate competitor, wants a $20 minimum,' the board wrote. 'These guys will never learn because they don't want to see the world as it really is.' But Governor Gavin Newsom's office has pushed back hard – questioning the integrity of the NBER paper and insisting California's wage law is working as intended. Tara Gallegos, Newsom's deputy director of communications, dismissed the study as politically motivated, telling Fox News Digital that it was 'linked to the Hoover Institution,' which she claimed had previously published 'false or misleading information' about the state's wage policies. She pointed to an October 2024 report in the San Francisco Chronicle, which said the early effects of AB 1228 'defy a lot of the doom–and–gloom predictions' made when the bill was signed. Gallegos also cited a February 2025 study by a UC Berkeley professor, which looked at fast food employment trends through December and found 'no negative effects.' 'Workers covered by the policy saw wage increases of 8 to 9 percent, with no negative wage or employment effects on non–covered workers,' she said. 'No negative effects on fast–food employment.' She added: 'The number of fast–food establishments grew faster in California than in the rest of the U.S.' As for prices, the Berkeley study claimed menu costs rose by only 1.5 percent – about six cents on a $4 hamburger. The NBER paper also looked at whether the law had a knock-on effect in full-service restaurants, which weren't subject to the $20 mandate but compete for the same workers. The authors found smaller but still negative employment effects – a median drop of 2.12 percent. And while critics were quick to blame the law for economic pain, the researchers warned against cherry-picking isolated data. They used placebo inference methods to compare California's job trends with other states – and in most cases, California showed the steepest employment drop.
Daily Mail
4 days ago
- Business
- Daily Mail
New study reveals crippling impact of California's minimum wage hike
California 's dramatic fast food wage hike may have backfired, according to a new economic study – wiping out an estimated 18,000 jobs across the state in just one year. The research, published this month by the National Bureau of Economic Research (NBER), analyzed the impact of Assembly Bill 1228, which mandated a $20 hourly minimum wage for fast food workers at large chains starting April 1, 2024. According to the economists behind the study, fast food employment in California dropped by 3.2 percent, while jobs in the same sector grew slightly across the rest of the U.S. 'Our median estimate translates into a loss of 18,000 jobs in California's fast–food sector relative to the counterfactual,' wrote researchers Jeffrey Clemens, Olivia Edwards, and Jonathan Meer. Before the law took effect, California's fast food industry was tracking the same employment trend as the rest of the country, the study found. But after AB 1228 was passed, the sector began to shrink. 'Following AB 1228's enactment, employment in the fast food sector in California fell substantially,' the paper states, citing declines 'even as employment in other sectors of the California economy tracked national trends'. Critics say the figures confirm what many feared: that a massive one–size–fits–all pay hike would push jobs out of reach for the workers it was meant to help. 'When it comes to central planning, history keeps the receipts: Wage controls never work,' wrote Heritage Foundation economist Rachel Greszler in a column reacting to the findings. 'That's because policymakers can set wage laws, but they can't outlaw the consequences.' She warned the law should serve as a wake–up call for other cities – especially Los Angeles, which recently voted to raise wages for hotel and airport workers to $30 an hour by 2028. 'The consequences of that wage hike on the fast–food industry should be a warning sign,' she said. The Wall Street Journal editorial board echoed that message, slamming politicians for 'magical thinking' around wage hikes. 'The Democratic Party's socialist nominee for New York mayor, Zohran Mamdani, has called for increasing the city's minimum wage to $30. Andrew Cuomo, his supposedly more moderate competitor, wants a $20 minimum,' the board wrote. 'These guys will never learn because they don't want to see the world as it really is.' But Governor Gavin Newsom's office has pushed back hard – questioning the integrity of the NBER paper and insisting California's wage law is working as intended. Tara Gallegos, Newsom's deputy director of communications, dismissed the study as politically motivated, telling Fox News Digital that it was 'linked to the Hoover Institution,' which she claimed had previously published 'false or misleading information' about the state's wage policies. She pointed to an October 2024 report in the San Francisco Chronicle, which said the early effects of AB 1228, 'defy a lot of the doom–and–gloom predictions' made when the bill was signed. Gallegos also cited a February 2025 study by a UC Berkeley professor, which looked at fast food employment trends through December and found 'no negative effects.' 'Workers covered by the policy saw wage increases of 8 to 9 percent, with no negative wage or employment effects on non–covered workers,' she said. 'No negative effects on fast–food employment.' She added: 'The number of fast–food establishments grew faster in California than in the rest of the U.S.' As for prices, the Berkeley study claimed menu costs rose by only 1.5 percent - about six cents on a $4 hamburger. The NBER paper also looked at whether the law had a knock-on effect in full-service restaurants, which weren't subject to the $20 mandate but compete for the same workers. The authors found smaller but still negative employment effects - a median drop of 2.12 percent. And while critics were quick to blame the law for economic pain, the researchers warned against cherry-picking isolated data.
