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A new study published by Pepperdine University seeks to resolve a debate about whether increasing the minimum wage for fast food workers in California to $20 an hour has led to unemployment.
The survey was released April 1st in line with AB 1228’s one-year anniversary and cites recent data from the California Employment Development Division showing a decline in employment of more than 23,100. At the same time, fast food employment has increased by 0.8% nationwide, researchers said.
“This new data should be a wake-up call for policymakers,” says Christopher Thornberg, founding partner of Beacon Economics, a private research group that partnered with Pepperdyne’s School of Public Policy on the study. “We are now clear about job losses in California’s fast food industry, and we are seeing what many have warned. A dramatic wage increase will produce real economic outcomes, especially for entry-level workers.”
The authors of this study argue that raising the minimum wage could have a negative impact not only on employment. It can also affect business sustainability, employee hours and benefits. They recommend that the state’s fast food council suspend new regulations, including another proposed wage increases, until “a fair and comprehensive study is being conducted.”
“Please, sir, I want a little more,” says the California fast food worker Union.
Since its establishment, the impact of AB 1228 has increased the minimum wage for workers in large fast food chains by $4 (25%) per hour.
Industry groups have been modest in Gavin Newsom’s office on how job data is interpreted. Both sides accusing others of having inherent biases, and several previous studies showing significant fast food unemployment in California have been withdrawn.
Citing the Bureau of Labor Statistics, the governor’s office told KTLA on Monday that average weekly wages in California’s fast food sector rose 12.9% year-on-year.
Tom Manzo, founder of the California Business and Industrial Alliance and a fierce critic of AB 1228, is unsure.
“The (Pepperdine University) report is just the latest confirmation that Governor Newsom’s false fast food minimum wage laws are killing jobs across California,” Manzo said. “If it’s enough, instead of spending time launching a new podcast, our governor should focus on fixing his mistakes for the small business owner and their employees.”
Customers will enter a McDonald’s restaurant in Burbank, California on July 22, 2024. (Photo: Mario Tama/Getty Images)
However, the two results of AB 1228 are less ambiguous.
First, increasing the minimum wage to $20 an hour marked the end of hundreds of thousands of fast food workers in Golden State. The franchise owner also says it helped recruit and retain it.
Another clear outcome is that customers are paying more for burgers, chicken strips, fries and tacos than before. Research shows that when AB 1228 was signed into law, all fast food chains in California began to raise prices and continue to do so even after it came into effect.
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