California’s fast food unemployment spiked after the $20 minimum wage for some workers, according to a new survey.
Not only was 10,700 jobs lost between June 2023 and June 2024, but a survey from the Berkeley research group found. However, after the new minimum wage became law, facility prices rose 14.5%.
“California’s fast food restaurants have also increased their adoption of automation and technology to offset rising labor costs,” the survey, released on February 18th, said.
“So it is not surprising that the number of employees per restaurant is declining.
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McDonald’s and Burger King logo (Soeren Stache/Picture Alliance by Getty Images)
“Californians are owing the costs of rising minimum wages due to lower jobs available and higher food costs,” he added. According to the California Grove, the study also uncovered the notion that minimum wage laws created employment.
The study said the authors were “retained” by saving local restaurants, but the study was conducted independently.
California-based restaurateur Andrew Gruelchev told Fox News Digital that he saw early on that could lead to negative outcomes in the services industry.
“I held my hand a few months ago,” he said.
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California Governor Gavin Newsom (Getty Images)
Guruel also advised businesses struggling to keep up with minimum wage requirements.
“We’ve reduced menu sizes, outsourced a large kitchen workforce, and used AI for back-office management,” Guruel said.
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Fast Food Drive-Thru (CNW Group/Restaurant Brand International Inc.)
The minimum wage for workers was $16 until the $20 minimum wage for fast food workers became law in April 2024. Gov. GavinNewsom said in September 2023 that it will help workers earn more income as their living costs rise.
“Califia fast food workers are paid at the highest wages in any state in the country. I have signed a bill that ensures these workers receive the fair wages they deserve,” he tweeted at the time.
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However, the report also warned that people could potentially reduce payments overall and “accelerate automation.”
“If it’s big enough, the combination of job elimination and reductions could lead to workers getting less income as a result of a $20 minimum wage,” the report said.
“For example, even if work is not excluded (a suspicious assumption given the BLS data above), a 20% reduction in hours worked on an overtime increase will erase financial gains from an increase in hourly wages of 25%, and workers reduce the same or gross income.”
California’s Fast Food Council may consider raising the minimum wage to $20.70, according to Restaurant Business Magazine.
Cameron Arcand is a political writer for Fox News Digital at Washington DC.
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