California’s Wage Increase Triggered Job Cuts, Inflation – Study Finds

A recent study has highlighted the unintended consequences of California’s fast-food minimum wage increase, revealing job losses, rising menu prices, and increased automation across the industry.

The Impact of the Wage Hike

In April 2023, California implemented a minimum wage increase for fast-food workers, raising hourly pay from $16.50 to $20. At the time, Governor Gavin Newsom praised the measure as a way to recognize the contributions of workers while stabilizing the industry.

However, a study by the Berkeley Research Group, using Bureau of Labor Statistics data, found that between June 2023 and June 2024, the state’s fast-food sector lost approximately 10,700 jobs.

Rising Prices and Automation

Along with job losses, menu prices at fast-food restaurants in California surged 14.5% between September 2023 and October 2024, nearly double the national average.

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To cope with the increased labor costs, nearly 89% of fast-food operators reported cutting employee hours while also investing in automation, replacing cashiers with self-service kiosks and computerized ordering systems.

The study pointed out that this shift particularly affected low-skilled workers, especially those without a high school diploma, who struggled to qualify for higher-paying positions.

Additional Changes in the Industry

Beyond job reductions, 35% of fast-food operators also cut employee benefits, and 87% planned to implement further cost-saving measures over the next year.

The study’s authors concluded that California’s wage increase has led to job losses and higher food prices, impacting both workers and consumers.

Meanwhile, In-N-Out Burger recently announced it would relocate its corporate headquarters from California to Tennessee, fueling further debate on the long-term effects of the policy .

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Layla Hango

Layla Hango is a dedicated author at The Chieftain Spear, where she delves into stories that highlight cultural richness, social issues, and community empowerment. With a passion for storytelling that inspires and informs, Layla brings a fresh perspective to her writing. Her work resonates with readers seeking meaningful dialogue and a deeper understanding of diverse experiences. Through her articles, Layla aims to spark positive change and celebrate the strength of collective voices.

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