Debunking Newsom’s Numbers Problem on California Fast Food Job Losses

Governor Gavin Newsom has questionable methods for finding numbers to support his misguided $20 minimum wage hike for fast food workers.

On June 26, Governor Newsom released a statement claiming the fast food industry was adding jobs under the $20 minimum wage mandate. To make this claim, Newsom referenced raw U.S. Bureau of Labor Statistics (BLS) jobs numbers (called “non-seasonally adjusted”). But the use of “non-seasonally adjusted” data was criticized by his office earlier this month when the numbers weren’t so politically palatable. So which numbers – and more importantly, which spin from Newsom’s press shop – should we believe?We did the math and unfortunately for Newsom, it turns out both datasets tell an unflattering story about his misguided $20 fast food wage law.

The U.S. Bureau of Labor Statistics (BLS) puts out two sets of numbers that make up the monthly job report. Both provide important insights on the current job landscape in California.

BLS puts out raw job numbers (called “non-seasonally adjusted”) that give a first look at monthly employment trends.

  • Unfortunately for Newsom, this set of numbers shows that this May’s annual employment growth figure is the lowest it’s been since the Great Recession in 2009-2010 (excluding COVID-related losses in May 2020).
  • As of May 2024, annual limited-service restaurant employment growth was just 0.4%. This time last year, annual LSR employment growth was 2.6%.

BLS revises these numbers and releases “seasonally adjusted” monthly numbers, which remove normal seasonal variation, like summer or holiday hiring movements, to show employment levels that may have more to do with policy changes and business cycle changes.

  • In a review of this second set of BLS data, EPI found that the monthly employment changes show California has actually lost over 2,500 fast food jobs since January 1, 2024.
  • Similar to the non-seasonally adjusted dataset, reviewing the larger annual trends shows as of May 2024, annual limited-service restaurant employment growth is stagnating (just 0.4% this year compared to 2.7% last year).
  • Considering this dataset is specifically adjusted to eliminate any normal fluctuations that aren’t related to the economy or politics, this evidence seriously undermines Newsom’s claim.
Month Number of CA Fast Food Jobs Change in Jobs
Jan 2024 742,326 1,050
Feb 2024 741,822 -503
Mar 2024 739,792 -2,031
Apr 2024 739,850 59
May 2024 739,804 -46

Source: U.S. Bureau of Labor Statistics and Federal Reserve Bank of St. Louis, All Employees: Leisure and Hospitality: Limited-Service Restaurants and Other Eating Places in California [SMU06000007072259001SA], retrieved from FRED, Federal Reserve Bank of St. Louis;, June 28, 2024.

By cherry-picking which numbers and which months to use when revealing employment trends, Governor Newsom is misconstruing the true harmful consequences of his $20 minimum wage, and ignoring the layoffs, price hikes, and restaurant closures that many in California are currently experiencing.

Regardless of the data used to understand what’s rapidly unfolding in California, Newsom’s premature victory lap ignores how his misguided $20 fast food minimum wage is hurting residents, employees, and local restaurants.