CA min wage for restaurant workers

[mspart]

https://thedailyeconomy.org/article/new-study-californias-20-minimum-wage-killed-18000-restaurant-jobs/

New Study: California’s $20 Minimum Wage Killed 18,000 Restaurant Jobs

The authors estimate that the negative employment effect is anywhere from -2.3 to -3.9 percent, (as compared to all states, or just to states with no minimum wage changes). Relative to a world where California did not increase the minimum wage, 18,000 jobs were lost. 

This is a large number, but it’s even more jarring when you realize how limited this law change was. Again, this bill only applied to restaurants with over 60 locations, so many other low-wage jobs were exempted. Even within the restaurant industry, implementation was limited.

In other words, those 18,000 more unemployed workers were the victims of a relatively limited change. This large drop puts talks of a national “living wage” — often proposed as $15 or more — in serious doubt. California has a relatively high cost of living, which means all else being constant, a $20 minimum wage would have an even larger unemployment effect where average wages are lower.

Very interesting.   18k jobs lost due to good intentions.   Another D fiasco.

mspart

 

[El Luchador]

They really are not smart people.  They have destroyed far more lives than they have improved. 

[reversaloffortune]

With cost of living being so high in CA, the minimum wage should be 20/hr across the board.

[ionel]

29 minutes ago, reversaloffortune said:

With cost of living being so high in CA, the minimum wage should be 20/hr across the board.

Because at $20/hr you can afford housing in CA or do you want fewer jobs thus more folks moving out of CA or more homeless? 

[Bigbrog]

1 hour ago, reversaloffortune said:

With cost of living being so high in CA, the minimum wage should be 20/hr across the board.

What is the reason the cost of living is so high in CA??  And no, the minimum wage shouldn't!

[reversaloffortune]

It's always funny to see people arguing against an increased minimum wage.  That would be the kind of tide that lifts all boats wouldn't it?

[ionel]

12 minutes ago, reversaloffortune said:

It's always funny to see people arguing against an increased minimum wage.  That would be the kind of tide that lifts all boats wouldn't it?

Well except for the 18,000 who lost their jobs.  

[reversaloffortune]

California employs well over 750,000 fast food workers and 1.8 million in the restaurant industry. 18,000 employees represents a 1 to 3 percent job loss in the industry. How of of that attrition is due to automation? Can't blame it all on minimum wage increases.

[ionel]

12 minutes ago, reversaloffortune said:

California employs well over 750,000 fast food workers and 1.8 million in the restaurant industry. 18,000 employees represents a 1 to 3 percent job loss in the industry. How of of that attrition is due to automation? Can't blame it all on minimum wage increases.

Did you read the article?  As the red viking would say - do you have a PhD in economics?  

[El Luchador]

1 hour ago, reversaloffortune said:

It's always funny to see people arguing against an increased minimum wage.  That would be the kind of tide that lifts all boats wouldn't it?

not always as simple as you think. 

 

 

[El Luchador]

 

 

 

[Offthemat]

It happens every time.  What’s that definition of insanity, again?

And the increase didn’t apply to all restaurants, just above a certain size, and some of them got waivers. 

Edited Thursday at 02:59 AM by Offthemat

[Lipdrag]

I start this by saying I am generally against minimum wage laws due to their effect on the young and unskilled first time job market entrant.  However, being a little bit numerate I find the anti-minimum wage people have some more work to do here.  

Original status vs. Wage hike:

• 500,000 workers x $15 per hour = $7.5 mn per hour worked.
• 482,000 workers x $20 per hour = $9.64 mn per hour worked.

So a 3.6% drop in employment is accompanied by a 29% increase in money earned per hour.  The arguments have to go much deeper into things like loss of total hours worked.  Loss of buying power (i.e. quality of life) for all the buyers of the food.  Increased use of welfare services, etc.  And also the effects higher barriers to entry at the lowest levels of the employment pool. 

There are tradeoffs and they must be addressed.  Is it better for 482,000 people have 33% more buying power at the cost of 18,000 being out of work.  We could easily pay the 18,000 their lost wages ($270k) out of the increased taxes on the $20/hour workers.  

I am not arguing for ever higher and higher minimum wages.  Otherwise the Buzz Lightyear Minimum Wage - To Infiniti and Beyond - would apply.  I am stating that a more coherent and comprehensive counter argument than 500k workers vs 482k workers working must be presented and defended.

[JimmySpeaks]

On 7/30/2025 at 9:19 PM, ionel said:

Did you read the article?  As the red viking would say - do you have a PhD in economics?  

I’m pretty sure that was RV and his burner account.  

[El Luchador]

26 minutes ago, Lipdrag said:

I start this by saying I am generally against minimum wage laws due to their effect on the young and unskilled first time job market entrant.  However, being a little bit numerate I find the anti-minimum wage people have some more work to do here.  

Original status vs. Wage hike:

• 500,000 workers x $15 per hour = $7.5 mn per hour worked.
• 482,000 workers x $20 per hour = $9.64 mn per hour worked.

So a 3.6% drop in employment is accompanied by a 29% increase in money earned per hour.  The arguments have to go much deeper into things like loss of total hours worked.  Loss of buying power (i.e. quality of life) for all the buyers of the food.  Increased use of welfare services, etc.  And also the effects higher barriers to entry at the lowest levels of the employment pool. 

There are tradeoffs and they must be addressed.  Is it better for 482,000 people have 33% more buying power at the cost of 18,000 being out of work.  We could easily pay the 18,000 their lost wages ($270k) out of the increased taxes on the $20/hour workers.  

I am not arguing for ever higher and higher minimum wages.  Otherwise the Buzz Lightyear Minimum Wage - To Infiniti and Beyond - would apply.  I am stating that a more coherent and comprehensive counter argument than 500k workers vs 482k workers working must be presented and defended.

You're only concerned about the direct loss of employment and considering only those people. Thats an over simplified view. There is a direct impact on every dollar they would have had, and a direct cost to the consumer. This drives inflation for everyone. 

[Offthemat]

53 minutes ago, Lipdrag said:

There are tradeoffs and they must be addressed.  Is it better for 482,000 people

Not getting into the numbers, I’ll quote Thomas Sowell :  “Stop and think.”   What the impact is to the numerous, youthful, unemployed, who desperately need work experience, yet won’t qualify for unemployment or welfare?  What will they do with time on their hands, and no money?  When they get bored?  Is it fair to them?  

[ionel]

1 hour ago, Lipdrag said:

We could easily pay the 18,000 their lost wages ($270k) out of the increased taxes on the $20/hour workers.  

But do the $20/hr workers even pay taxes? 

[Lipdrag]

El Luchador, Offthemat, ionel.  All great points and I welcome the discussion.  I wish the article would address all of this also.  But perhaps an article cannot deep dive the topic and must address on the surface level only.  No matter how insufficient the analysis and conclusions.

[El Luchador]

27 minutes ago, Lipdrag said:

El Luchador, Offthemat, ionel.  All great points and I welcome the discussion.  I wish the article would address all of this also.  But perhaps an article cannot deep dive the topic and must address on the surface level only.  No matter how insufficient the analysis and conclusions.

In depth discussion on economics generally doesn't draw in a lot of readers.

[mspart]

If there is more money floating around (via higher minimum wage) what happens to the price of commodities and housing?   They charge what the market will bear, so their prices increase.   So the effect of a min wage increase to provide a living wage is now in a position to be raised again because prices quickly rise and the effect is lost.   And round and round we go.  

Why is minimum wage supposed to be a living wage?   Minimum wage jobs are entry level jobs and really are meant for teens and first time job seekers.   They are not usually in a position to be living on their own, it is giving them experience working and taking orders and doing what the boss wants them to do.   After that they get better jobs where they do more and make  more.   It makes more sense to have roommates so that the living cost is reduced.  

The higher min wage laws also reduce hours for many of the workers that are left because the restaurant owners, in this case, can't afford and the public are not willing to pay the higher prices.   So the business goes down and not as many workers are needed.   Eventually automation makes more sense and then the jobs are lost.   How does any of this help anyone?

mspart

[reversaloffortune]

The prevailing myth among conservatives that minimum wage wasn't meant to be a living wage is patently false.  The entire purpose of the Minimum Wage Act of 1938 was to ensure employers provided a minimum livable wage.

[ionel]

8 minutes ago, reversaloffortune said:

The prevailing myth among conservatives that minimum wage wasn't meant to be a living wage is patently false.  The entire purpose of the Minimum Wage Act of 1938 was to ensure employers provided a minimum livable wage.

Yet you dont have a PhD in economics correct?  Asking for my friend rv.  

[El Luchador]

44 minutes ago, reversaloffortune said:

The prevailing myth among conservatives that minimum wage wasn't meant to be a living wage is patently false.  The entire purpose of the Minimum Wage Act of 1938 was to ensure employers provided a minimum livable wage.

It was meant to price blacks out of the labor market. There very much is a racial component to the minimum wage.