New study claims ‘significant' job losses since California's fast-food minimum wage increase
The study, released on April 1 to coincide with the one-year anniversary of AB 1228, says the sector has seen a 'significant' decline of over 23,100 jobs. At the same time, fast-food employment grew by 0.8% nationwide, researchers said.
'This new data should be a wake-up call for policymakers,' said Christopher Thornberg, founding partner at Beacon Economics, a private research group that partnered with Pepperdine's School of Public Policy. 'The employment losses in California's fast-food industry are now evident, and they confirm what many had warned about: Drastic wage hikes create real economic consequences, especially for entry-level workers.'
The study's authors argue that raising the minimum wage could negatively impact more than just employment; it could also affect business sustainability, employee work hours and benefits. They recommend the state's Fast Food Council pause any new regulations, including another proposed wage increase, until 'unbiased, comprehensive research is conducted.'
'Please, sir, I want some more,' says California fast food workers' union
Since its inception, the impact of AB 1228, which increased the minimum wage for workers at large fast-food chains by $4 per hour, or 25%, has been a hotly debated topic.
Industry groups have consistently sparred with Gov. Gavin Newsom's office over how to interpret the jobs data. Both sides accuse the other of having inherent biases, and some previous studies showing significant fast-food job losses in California have, indeed, been retracted.
Citing the Bureau of Labor Statistics, the governor's office told KTLA on Monday that average weekly wages in California's fast-food sector have increased by 12.9% year over year.
Tom Manzo, founder of the California Business and Industrial Alliance and a fierce critic of AB 1228, isn't convinced.
'(The Pepperdine University) report is just the latest confirmation that Governor Newsom's misguided fast-food minimum wage law is killing jobs across California,' Manzo said. 'When will enough be enough? Instead of spending time launching a new podcast, our Governor should be focused on fixing his mistake for the sake of small business owners and their employees.'
Two outcomes of AB 1228, however, are less ambiguous.
First, increasing the minimum wage to $20 per hour has helped hundreds of thousands of fast-food workers in the Golden State make ends meet. Franchise owners say it has also helped with recruiting and retention.
The other outcome is that customers are paying more for their burgers, chicken strips, French fries and tacos than before. Many fast-food chains began raising prices when AB 1228 was signed into law and continued to do so after it took effect.
Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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USA Today
8 hours ago
- USA Today
Gov. Newsom signs housing legislation overhauling California's landmark environmental law
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New York Times
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Yahoo
12 hours ago
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At base, all CEQA says is that proponents of a project must disclose and, if possible, lessen its environmental effects before being approved. Yet the process CEQA kicks off can take years as developers and local governments complete reams of studies, opponents sue them as inadequate and judges send everyone back to start all over again. Time is money, and project opponents soon realized that they could use this uncertainty to their advantage. Sometimes, if their complaints fell on deaf ears at City Hall, threatening a CEQA challenge was the only way to get themselves heard and avoid harmful outcomes. But in other circumstances, the law became a powerful cudgel wielded to influence concerns that at best had a tangential relationship to the environment. Examples are legion. The owner of a gas station in San Jose sued a nearby rival gas station that wanted to add a few more pumps. Pro-life advocates sued a proposed Planned Parenthood clinic in South San Francisco. Homeowners in Berkeley sued the University of California over its plans to increase enrollment at the state's flagship university and the traffic and noise that might result. Over time, CEQA negotiations became embedded in California's development regime, known and used by all the major players. Los Angeles Mayor Karen Bass once recalled that as a community organizer in South L.A. in the 1990s she used CEQA to try to stop liquor stores from opening. A company owned by billionaire developer Rick Caruso, Bass' opponent in the most recent mayoral election and normally a CEQA critic, this year filed a CEQA lawsuit challenging a major redevelopment of a television studio near a Caruso shopping mall. For housing, the primary interest group invested in CEQA at the state level has been labor organizations representing construction workers. Their leaders have argued that if legislators grant CEQA relief to developers, which boosts their bottom lines, then workers should share in the spoils through better pay and benefits. This union opposition was enough in 2016 to prevent a proposal from then-Gov. Jerry Brown to limit CEQA challenges to urban housing development from even getting a vote in a legislative committee. A year later, a version of Brown's bill passed but only because developers who wanted to take advantage were required to pay union-level wages to workers. Just about every year since, lawmakers have engaged in this dance with labor groups. In 2022, the California Conference of Carpenters defected from the State Building and Construction Trades Council and supported a less-strict version of labor standards, which lawmakers ushered into multiple bills. But housing construction hasn't followed. The number of projects that have been issued permits are millions less than what Newsom promised to build on the campaign trail in 2017. Californians continue to pay record prices to house themselves, and those fleeing the state often cite the cost of living as the reason. Newsom and legislators decided they needed to do more. 'We don't want to sit here and ram our head against the wall on the politics and then have nothing to show for it,' said Assemblymember Buffy Wicks (D-Oakland) at Monday's signing ceremony. Wicks authored legislation this year that waived CEQA rules for urban housing development without any labor requirements and was working it through the regular process. In May, Newsom grabbed Wicks' bill and additional CEQA reform legislation and said he wanted them to pass as part of the budget. Doing so would fast-track the bills into law without the normal whittling down that happens in committee hearings. As budget negotiations heated up, Newsom doubled down. In a rare move, he insisted on tying the approval of the state's entire spending plan for this year to the passage of CEQA reforms. That meant legislators who otherwise would be opposed could only vote no if they were willing to torpedo the budget. What emerged was a clean CEQA exemption for homebuilders in urban multifamily areas. Union-level wages for construction workers only are required for high-rise or low-income buildings, both of which often are paid now because of specialized labor required for taller buildings and other state and local rules for affordable construction. CEQA doesn't affect single-family home construction. How much this is going to matter immediately for homebuilding isn't clear. Studies are mixed on CEQA's effects. One by UC Berkeley law professors found that fewer than 3% of housing projects in many big cities across the state over a three-year period faced any CEQA litigation. Another found tens of thousands of housing units challenged under CEQA in just one year. Still, more advocates of reform argue that it's impossible to quantify the chilling effect that the threat of CEQA lawsuits have on development in California and how much the law has dominated the debate. 'This signals a seismic shift in Democratic politics in California from NIMBYism to abundance,' said Mott Smith, board chair of the Council of Infill Builders, a real estate trade group that advocates for urban housing. 'You can touch this mythical third rail and live to see another day.' Those who live across the street from a proposed five-story apartment building and oppose the housing will have to find a way other than a 55-year-old environmental law to stop it. Sign up for Essential California for news, features and recommendations from the L.A. Times and beyond in your inbox six days a week. This story originally appeared in Los Angeles Times.
