Latest news with #wagehike
Daily Mail
4 days ago
- Business
- Daily Mail
California's minimum wage hike may have cost thousands of jobs
According to the economists behind the study, fast food employment in California dropped by 3.2 percent, while jobs in the same sector grew slightly across the rest of the U.S. 'Our median estimate translates into a loss of 18,000 jobs in California's fast–food sector relative to the counterfactual,' wrote researchers Jeffrey Clemens, Olivia Edwards, and Jonathan Meer. Before the law took effect, California's fast food industry was tracking the same employment trend as the rest of the country, the study found. But after AB 1228 was passed, the sector began to shrink. 'Following AB 1228's enactment, employment in the fast food sector in California fell substantially,' the paper states, citing declines 'even as employment in other sectors of the California economy tracked national trends'. Critics say the figures confirm what many feared: that a massive one–size–fits–all pay hike would push jobs out of reach for the workers it was meant to help. 'When it comes to central planning, history keeps the receipts: Wage controls never work,' wrote Heritage Foundation economist Rachel Greszler in a column reacting to the findings. 'That's because policymakers can set wage laws, but they can't outlaw the consequences.' She warned the law should serve as a wake–up call for other cities – especially Los Angeles, which recently voted to raise wages for hotel and airport workers to $30 an hour by 2028. 'The consequences of that wage hike on the fast–food industry should be a warning sign,' she said. The Wall Street Journal editorial board echoed that message, slamming politicians for 'magical thinking' around wage hikes. 'The Democratic Party's socialist nominee for New York mayor, Zohran Mamdani, has called for increasing the city's minimum wage to $30. Andrew Cuomo, his supposedly more moderate competitor, wants a $20 minimum,' the board wrote. 'These guys will never learn because they don't want to see the world as it really is.' But Governor Gavin Newsom's office has pushed back hard – questioning the integrity of the NBER paper and insisting California's wage law is working as intended. Tara Gallegos, Newsom's deputy director of communications, dismissed the study as politically motivated, telling Fox News Digital that it was 'linked to the Hoover Institution,' which she claimed had previously published 'false or misleading information' about the state's wage policies. She pointed to an October 2024 report in the San Francisco Chronicle, which said the early effects of AB 1228 'defy a lot of the doom–and–gloom predictions' made when the bill was signed. Gallegos also cited a February 2025 study by a UC Berkeley professor, which looked at fast food employment trends through December and found 'no negative effects.' 'Workers covered by the policy saw wage increases of 8 to 9 percent, with no negative wage or employment effects on non–covered workers,' she said. 'No negative effects on fast–food employment.' She added: 'The number of fast–food establishments grew faster in California than in the rest of the U.S.' As for prices, the Berkeley study claimed menu costs rose by only 1.5 percent – about six cents on a $4 hamburger. The NBER paper also looked at whether the law had a knock-on effect in full-service restaurants, which weren't subject to the $20 mandate but compete for the same workers. The authors found smaller but still negative employment effects – a median drop of 2.12 percent. And while critics were quick to blame the law for economic pain, the researchers warned against cherry-picking isolated data. They used placebo inference methods to compare California's job trends with other states – and in most cases, California showed the steepest employment drop.
Daily Mail
4 days ago
- Business
- Daily Mail
New study reveals crippling impact of California's minimum wage hike
California 's dramatic fast food wage hike may have backfired, according to a new economic study – wiping out an estimated 18,000 jobs across the state in just one year. The research, published this month by the National Bureau of Economic Research (NBER), analyzed the impact of Assembly Bill 1228, which mandated a $20 hourly minimum wage for fast food workers at large chains starting April 1, 2024. According to the economists behind the study, fast food employment in California dropped by 3.2 percent, while jobs in the same sector grew slightly across the rest of the U.S. 'Our median estimate translates into a loss of 18,000 jobs in California's fast–food sector relative to the counterfactual,' wrote researchers Jeffrey Clemens, Olivia Edwards, and Jonathan Meer. Before the law took effect, California's fast food industry was tracking the same employment trend as the rest of the country, the study found. But after AB 1228 was passed, the sector began to shrink. 'Following AB 1228's enactment, employment in the fast food sector in California fell substantially,' the paper states, citing declines 'even as employment in other sectors of the California economy tracked national trends'. Critics say the figures confirm what many feared: that a massive one–size–fits–all pay hike would push jobs out of reach for the workers it was meant to help. 'When it comes to central planning, history keeps the receipts: Wage controls never work,' wrote Heritage Foundation economist Rachel Greszler in a column reacting to the findings. 'That's because policymakers can set wage laws, but they can't outlaw the consequences.' She warned the law should serve as a wake–up call for other cities – especially Los Angeles, which recently voted to raise wages for hotel and airport workers to $30 an hour by 2028. 'The consequences of that wage hike on the fast–food industry should be a warning sign,' she said. The Wall Street Journal editorial board echoed that message, slamming politicians for 'magical thinking' around wage hikes. 'The Democratic Party's socialist nominee for New York mayor, Zohran Mamdani, has called for increasing the city's minimum wage to $30. Andrew Cuomo, his supposedly more moderate competitor, wants a $20 minimum,' the board wrote. 'These guys will never learn because they don't want to see the world as it really is.' But Governor Gavin Newsom's office has pushed back hard – questioning the integrity of the NBER paper and insisting California's wage law is working as intended. Tara Gallegos, Newsom's deputy director of communications, dismissed the study as politically motivated, telling Fox News Digital that it was 'linked to the Hoover Institution,' which she claimed had previously published 'false or misleading information' about the state's wage policies. She pointed to an October 2024 report in the San Francisco Chronicle, which said the early effects of AB 1228, 'defy a lot of the doom–and–gloom predictions' made when the bill was signed. Gallegos also cited a February 2025 study by a UC Berkeley professor, which looked at fast food employment trends through December and found 'no negative effects.' 'Workers covered by the policy saw wage increases of 8 to 9 percent, with no negative wage or employment effects on non–covered workers,' she said. 'No negative effects on fast–food employment.' She added: 'The number of fast–food establishments grew faster in California than in the rest of the U.S.' As for prices, the Berkeley study claimed menu costs rose by only 1.5 percent - about six cents on a $4 hamburger. The NBER paper also looked at whether the law had a knock-on effect in full-service restaurants, which weren't subject to the $20 mandate but compete for the same workers. The authors found smaller but still negative employment effects - a median drop of 2.12 percent. And while critics were quick to blame the law for economic pain, the researchers warned against cherry-picking isolated data.
CNA
04-07-2025
- Business
- CNA
Japan May household spending rises faster than expected
TOKYO :Japanese household spending in May rose 4.7 per cent from a year earlier, internal affairs ministry data showed on Friday, better than the median market forecast for a 1.2 per cent rise. On a seasonally adjusted, month-on-month basis, spending increased 4.6 per cent, versus an estimated 0.4 per cent uptick. Consumption and wage trends are among key factors the Bank of Japan is watching to gauge economic strength and decide how soon to raise interest rates. Hefty pay hikes have been seen as essential to counter inflation-induced sharp increases in the cost of living. Japanese companies agreed to raise wages by 5.25 per cent this year, marking the biggest pay hike in 34 years, the country's largest labour union group Rengo said on Thursday.
CNA
03-07-2025
- Business
- CNA
Japanese firms agree biggest pay hikes in 34 years, top union group's final tally shows
TOKYO :Japanese companies logged their biggest wage hikes in three decades this year, the nation's largest labour union group said. The final tally of annual labour talk results showed Japanese companies have agreed to raise pay by 5.25 per cent this year, the biggest pay hike in 34 years, the 7 million member-strong group Rengo said on Thursday. The robust wage growth follows an average increase of 5.10 per cent last year and 3.58 per cent the year before, suggesting that solid salary growth is becoming the new norm in a country where wages were stagnant for decades.
Japan Times
14-05-2025
- Business
- Japan Times
Japan considers five-year wage hike plan for smaller firms
Japan plans to draw up a five-year plan to promote wage hikes for small and midsize companies, which account for 70% of employment in the country, sources said Tuesday. The government will call on the public and private sectors to spend about ¥60 trillion in total over the five years to fiscal 2029 to improve the productivity of such firms, informed sources said. The plan will be presented at a meeting of the government's Council of New Form of Capitalism Realization, chaired by Prime Minister Shigeru Ishiba, to be held as early as later this week, and will be included in an implementation plan to be compiled in June, according to the sources. The Ishiba administration has set a target of raising the country's average minimum hourly wage to ¥1,500 by the end of the 2020s. During the five years, the government will work intensively on raising labor productivity, or added value created per person, in 12 industries, including the restaurant and accommodation sectors where labor shortages are serious, by promoting labor-saving and digitalization investment. The 12 industries also include retail, manufacturing, nursing care and welfare, agriculture, forestry and fisheries industries as well as the sector covering hairdressing, beauty, cleaning and other lifestyle-related services. A labor-saving investment promotion plan tailored to each industry will be formulated. The government will aim to increase the labor productivity of the restaurant sector, which employs about 4 million people, by 35% over the five years. An action plan will be drawn up based on good examples such as those involving the use of self-checkout terminals and serving robots. The government also hopes to promote labor-saving measures such as the introduction of self-check-in machines in the accommodation industry, which will aim to improve productivity by 35% as well.
