CA’s feel-good fast-food flop
Denise Kalm’s Right on the Left Coast analyzes California’s $20 fast-food minimum wage that was meant to help workers, but has spiked prices and axed over 10k jobs instead. In Silicon Valley, costs are high, automation is at the forefront of innovators’ minds, and job scarcity worries workers; it begets the question: Is this policy progress or a recipe for disaster? If it's the latter, Bay Area burger joints might soon be staffed by bots, not teens.
Just like the nation, California residents have widely varying costs of living. If you live in the Central Valley, or in far North California, you have lower living costs than San Francisco or LA. When California decided to raise the fast-food minimum wage to $20/hour, a 25% increase, they were focused on people who were no longer young, had families and had somehow not found a way to move up in the work world. Of course, they can’t live on lower wages. But for almost of all of us, the idea that you can keep working your high school or college job flipping burgers for the rest of your life makes no sense.
Even without a college degree, there are many ways to make a good, even great living by learning a trade. California is badly in need of great electricians, builders, plumbers, etc. These are jobs with a great future. The quote “failing to plan is planning to fail” applies here. You should not expect to support yourself and a family with a low-end job.
What has been the result of our over-generous minimum wage? Since the wage increase was implemented in 2023, thousands of people have lost jobs. Fast food restaurants lost 10,700 jobs between June 2023 and June 2024. Since September 2023, food prices at restaurants have increased by 14.5%, and many places have invested in automation. Even at nice places, you increasingly see that you have to order at the counter and sometimes, even pick up your own food, because that lessens the necessity to have more people to serve you. Many have reported seeing weird added costs, including mandatory tips, on top of the increased wages. This leads to people deciding to avoid eating out as much as they might have.
Sadly, despite evidence to the contrary, the Fast-Food Council’s Planning Subcommittee plans to meet this year to decide on another increase in the minimum wage. Meanwhile, not just older workers, but the many teens who started their work life in the fast-food industry are finding it impossible to land a job.
Read the whole thing here.
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