EPI Warns California: West Hollywood is A Cautionary Tale On Sky-High Minimum Wages

This week, One Fair Wage organizers called for California to make the $20 minimum wage currently just for fast food employees apply statewide. Yet the group’s demands don’t line up with the consequences restaurants, employees, and residents are feeling through job losses, price hikes, and closure of local eateries. This fallout wasn’t a surprise to economists, who have found historically steep wage hikes have cost jobs and shuttered restaurants. But California had a homegrown example: a West Hollywood survey found the annual wage hikes up to $19.08 per hour in 2023 decimated the city’s restaurant scene.

EPI’s research director Rebekah Paxton wrote in National Review this week that state lawmakers should take notes:

In 2021, Unite Here Local 11, a controversial Los Angeles-based labor group, picketed its way into a $17.64 minimum wage for hotel workers in the City of West Hollywood, the highest rate in the country. The union didn’t stop there; it successfully pushed to spread this policy to all industries in the city within the same year.

As a result, West Hollywood’s minimum wage increased sharply, rising from $13–14 in 2021 (depending on business size) to a peak of $19.08 per hour last July.

The consequences of the policy were devastating, and immediate.

Numerous businesses slashed hours, cut staff levels, or closed their doors. Carmen Bolas, a small-business owner in West Hollywood, laid off 40 percent of her staff in a last-ditch effort to keep her business alive after the wage hike. The New York Times reported on another local restaurateur, Josiah Citrin, who was forced to reduce his staff by 30 percent.

West Hollywood was scheduled to have another wage increase this July, compelling over 50 restaurants to petition the City Council to suspend the hikes. The council agreed in a 4–1 vote, postponing future wage increases until January 1, 2025.

Read the full op-ed at the National Review here.