A comprehensive study has debunked dire predictions about California's groundbreaking $20 minimum wage law for fast food workers, revealing minimal disruption to the industry while delivering tangible benefits to employees.
The Shift Project's extensive analysis, conducted between April and June 2024, found that the wage increase did not lead to the widespread negative consequences many had forecast. Contrary to warnings of reduced hours and understaffing, the research showed that weekly work hours remained stable for California's fast food workers, with staffing levels actually improving.
The study's findings stand in stark contrast to earlier media coverage and industry predictions. Prior to implementation, various outlets had warned of dramatic price increases and operational challenges. However, real-world data tells a different story.
Price impacts proved modest, according to research by the Institute for Research on Labor and Employment. Using Uber Eats data, they found menu prices increased by just 3.7% after the wage hike – translating to approximately 15 cents on a $4 hamburger.
The law, which took effect in April 2024, requires fast food chains with more than 60 locations nationwide to pay workers a minimum of $20 per hour, representing a $4 increase. This policy affects over 700,000 workers across California's fast food sector.
Claims of job losses have also been refuted. While industry groups pointed to supposed cuts of 9,500 jobs, analysis of Bureau of Labor Statistics data shows employment in California's fast food sector actually grew by 1.9% between August 2023 and August 2024.
The Shift Project's research also revealed that employers did not reduce benefits to offset higher wages. Workers maintained their existing health insurance, dental coverage, paid sick time, and retirement benefits.
This evidence-based assessment suggests that California's fast food wage increase has achieved its intended goal of improving worker compensation without triggering the negative consequences predicted by critics. The state's experience may serve as a valuable case study for other regions considering similar policies.