Fact Check: California's fast food minimum wage caused an 18,000 job loss in the sector.

Fact Check: "California's fast food minimum wage caused an 18,000 job loss in the sector."

What We Know

The claim that California's fast food minimum wage caused an 18,000 job loss is supported by a recent study from the National Bureau of Economic Research (NBER), which found that employment in California's fast food sector declined by 2.7% relative to other states from September 2023 to September 2024. Adjusting for various factors, this decline translates to an estimated loss of 18,000 jobs in the sector (source-2).

Conversely, a study by the Center on Wage and Employment Dynamics at UC Berkeley reported that the implementation of the $20 minimum wage did not lead to job losses in the fast food sector. The study indicated that employment levels remained steady, and the wage increase resulted in an 18% pay rise for workers without significant job cuts (source-1).

Analysis

The conflicting findings between the NBER study and the UC Berkeley study highlight the complexity of assessing the impact of minimum wage increases on employment. The NBER study, which reported an 18,000 job loss, utilized data from the Quarterly Census of Employment and Wages and adjusted for pre-existing employment trends, suggesting a rigorous analytical approach. However, it is important to note that the NBER is known for its economic research and is generally considered a credible source, although it may have a more conservative bias regarding labor market impacts (source-2).

On the other hand, the UC Berkeley study, which found no job losses, emphasizes the potential for minimum wage increases to improve worker earnings without negatively impacting employment levels. This study is also credible, given its affiliation with a reputable academic institution and its use of comprehensive data from over 11,000 reported salaries and 1,500 restaurants (source-1).

The divergence in findings may stem from differences in methodology, data sources, and the timeframes analyzed. The NBER's focus on a specific timeframe and comparative analysis with other states may yield different conclusions than a broader analysis of wage impacts on employment stability.

Conclusion

The claim that California's fast food minimum wage caused an 18,000 job loss is Partially True. While the NBER study provides a quantitative estimate of job losses attributed to the wage increase, the UC Berkeley study counters this by showing stable employment levels. The evidence suggests that while there may have been job losses, the extent and causality are debated among researchers. Thus, the claim holds some truth but lacks consensus in the broader economic analysis.

Fact Check: California's fast food minimum wage caused an 18,000 job loss in the sector.