Study: California fast‑food wage hike didn't cut jobs
Coverage of a UC Berkeley study says California’s fast‑food minimum wage increase to $20 an hour did not cause the predicted job losses or big price hikes in the sector. The finding has been circulated across reports examining the law’s early economic effects (crooksandliars.com) (timesofsandiego.com).
A new University of California, Berkeley study says California’s $20 fast-food wage raised pay without cutting jobs in the chains covered by the law. (irle.berkeley.edu) The wage floor took effect on April 1, 2024, under Assembly Bill 1228, which applies to fast-food restaurants that are part of chains with at least 60 locations nationwide. California’s Department of Industrial Relations says the law also created a Fast Food Council to set future standards for the industry. (dir.ca.gov) In the April 1, 2026 working paper, economists Michael Reich and Denis Sosinskiy said average weekly wages for covered workers rose about 11 percent. They said employment did not fall and prices rose about 1.5 percent, which they described as a partial pass-through of higher labor costs. (irle.berkeley.edu) The researchers used several data sets instead of a single payroll count. Their paper says it combined Glassdoor job-posting pay data, Square payroll records, Advan mobility-based employment data, scraped menu prices from more than 2,000 restaurants, and federal Quarterly Census of Employment and Wages and Current Employment Statistics data for checks. (irle.berkeley.edu) The dispute has centered on whether a sector-specific minimum wage would force restaurants to cut staffing, hours, or both. Berkeley’s paper says earlier business-press reports relied heavily on anecdotes, while its design tried to separate broader industry trends from the effect of the wage law itself. (irle.berkeley.edu) The policy was unusual because it set a higher floor for one slice of the labor market rather than for all workers statewide. California’s general minimum wage is $16.90 an hour in 2026, while covered fast-food workers remain at $20 an hour. (dir.ca.gov) Critics have pointed to other research with different findings. A March 2026 University of California, Santa Cruz report, summarized by the university and USA Today, said the law was associated with reduced hours, higher menu prices, and more pressure to automate. (news.ucsc.edu) (usatoday.com) Industry groups have made even stronger claims. The International Franchise Association said in April 2025 that the law had cost more than 22,000 jobs and pushed food prices up 14.5 percent, figures Berkeley researchers and state officials have disputed. (franchise.org) (irle.berkeley.edu) Berkeley’s new paper does not end the argument over hours, automation, or profits, but it sharpens the main early finding after two years of data: the predicted fast-food job collapse did not show up in its estimates. (irle.berkeley.edu)
