California Governor Gavin Newsom’s spin room has been awfully quiet since new state jobs data dropped over the weekend.
Last week, the governor published an op-ed claiming California’s fast food industry was in fact thriving – expressing no concerns about restaurant closures, layoffs, or price hikes following the April 1 hike up from $16 to $20 per hour. Newsom claims “California now has more fast-food jobs than ever” and insists his policy is “economically sound.”
He continues to cite non-seasonally adjusted jobs data to claim jobs were growing in the state’s fast food industry – despite economists and the Los Angeles Times claiming a seasonally revised version of the data released by the Bureau of Labor Statistics (BLS) provides a more accurate look at actual employment trends.
Unfortunately, the governor’s words came a bit too soon. Just days after, BLS dropped new jobs numbers for the month of August – and no matter which version you look at, the story is getting worse for California’s fast food industry.
JOB LOSSES
August jobs numbers adjusted for seasonal factors, such as regular summer hiring trends, shows the state now has a net loss of 5,416 fast food jobs since the start of the year.
| Month | Number of Jobs |
| Jan 2024 | 742,277 |
| Feb 2024 | 741,579 |
| Mar 2024 | 739,286 |
| Apr 2024 | 738,732 |
| May 2024 | 737,478 |
| Jun 2024 | 736,111 |
| Jul 2024 | 737,559 |
| Aug 2024 | 736,861 |
Source: U.S. Bureau of Labor Statistics and Federal Reserve Bank of St. Louis
Even using the governor’s preferred dataset, despite being raw numbers not adjusted for seasonal variation, California saw a dip in fast food jobs between July and August.
Looking at either dataset, California’s fast food industry had the slowest employment growth since 2010 (barring COVID-related losses in early 2020).
If that isn’t enough to convince the governor, maybe some alternative sources will help.
UNEMPLOYMENT
Historically, job losses incurred during recent state and industry wage hikes under Newsom’s tenure are manifesting longer-term damage to the labor force.
Analysts at Los Angeles-based Beacon Economics have found that minimum wage hikes have given California one of the highest state unemployment rates in the country (over 5% this year). Even worse, this trend is particularly bad for younger workers. Ninety percent of those unemployed this year were under the age of 25. Unemployment for teen workers (16-19 years old) went from 14.5% last year to 22.9% this year.
PRICE HIKES
Another new data drop comes from payment platform Toast. Amid reports that restaurants are turning to menu price increases to try to adjust to higher wage bills, this quarter California had one of the highest average sandwich prices in the country.
As a result of higher prices, Toast finds that tips left for employees at fast food restaurants have declined over the course of this year.
While devastating to California’s fast food restaurants and employees, lawmakers were forewarned of the consequences this $20 fast food wage bill and the rampant statewide wage hikes would have.
An EPI survey of fast food operators representing tens of thousands of California fast food employees found large majorities had already increased prices, consolidated positions, and laid off workers to mitigate the increasing minimum wage. Even more say this trend will have to continue in the next year, especially if activists get the 3.5% additional increase they are currently pushing for in January 2025.