This week, advocates for Governor Gavin Newsom’s $20 fast food minimum wage are coming out in droves – clawing at alternative data sources to prove Newsom is right and restaurant operators are wrong about the impacts of the wage law.
The two studies that surfaced over the last two weeks, which were promptly hailed by the Governor himself, don’t take into account that Bureau of Labor Statistics seasonally adjusted data shows net employment levels are falling.
In National Review, EPI’s Mike Saltsman and Rebekah Paxton lay out the facts in more detail.
“…Just days ahead of another monthly jobs report from the Bureau of Labor Statistics (BLS), California governor Gavin Newsom took to the spin room again to tout the success of his $20-minimum-wage law for fast-food restaurants. The latest BLS data drop shows that Newsom’s spin is resoundingly inaccurate.
Once the fast-food-wage law was signed, in September 2023, California’s restaurants were plunged into chaos. By January 2024, restaurants were vocal about their concerns: warning of closures, reductions in employee hours, and job cuts. Those fears became reality in April, when the law took effect.
The governor’s office had previously stated that those looking into California jobs data should use seasonally adjusted figures — since economists agree that such figures provide the most accurate picture of the economic situation. Now, he’s ignoring his own advice and using non-adjusted data because they are more politically palatable. Most recently, he claimed–using unrevised data to perhaps save face–that the industry has added 11,000 jobs.
A few days later, August data revealed that California is down a net 5,400 fast-food jobs this year, accounting for seasonal variations such as summer and winter holiday hiring and subsequent dips. Even if one used the governor’s preferred data set, one would find that California had a jobs decline over the past month.
The annual growth rate in the state’s fast-food industry has stagnated since the implementation of this law. This August, year-over-year growth was roughly two-tenths of a percentage point. Compare that with 2023 — before the fast-food-wage law was signed — when year-over-year jobs growth for any given month was as high as five percentage points…”
California’s fast food problem is unique due to its own bad law – per EPI’s recent analysis of California’s fast food industry employment levels compared to that of select neighboring states.
To learn more about the history of the UC-Berkeley labor center’s research and activism, read our initial response here.