Silicon Valley's poor get poorer while the rich… also get poorer
Image by Bearrobotics.ai
The data re: the impact of the State's and Silicon Valley's increased minimum wage for fast food workers is in, and it's grim: jobs are down a net 5,400 this year, and employees have actually lost earnings amounting to $37 million. 93% of employers say they'll need to further raise their prices in the next year. Nat'l Review reports.
A few days later, August data revealed that California is down a net 5,400 fast-food jobs this year, accounting for seasonal variations such as summer and winter holiday hiring and subsequent dips. Even if one used the governor’s preferred data set, one would find that California had a jobs decline over the past month.
The annual growth rate in the state’s fast-food industry has stagnated since the implementation of this law. This August, year-over-year growth was roughly two-tenths of a percentage point. Compare that with 2023 — before the fast-food-wage law was signed — when year-over-year jobs growth for any given month was as high as five percentage points.
Yet another BLS data set, the quarterly Census of Employment and Wages, tracks employer-reported jobs and wages based on federally mandated unemployment filings. These data cover most employers rather than the sample that is represented in the monthly jobs releases, and they provide an even more accurate economic picture.
The latest available numbers, from September 2023 to March 2024, confirm that California’s fast-food restaurants have shed thousands of jobs since the signing of the law and confirm what restaurant owners and their employees have been saying for months: The $20-minimum-wage law has hurt California.
What’s more concerning is how this has affected workers’ earnings. A preliminary look at total quarterly earnings shows that employees have lost roughly $37 million between September 2023 and March 2024, compared with positive quarterly-earnings-growth rates over similar periods pre-pandemic.
The situation is likely only to worsen. According to a recent survey of nearly 200 California fast-food operators that employ tens of thousands of workers in the state, 93 percent of operators said they would have to raise menu prices even higher in 2025, and 87 percent said they would need to continue to reduce staff or consolidate positions next year. And that’s without taking into account a potential additional 3.5 percent wage hike that has been presented to the state’s Fast Food Council with ardent union support. This is hardly a modest impact for Newsom’s “modest” law.
Read the full story here.
Follow Opportunity Now on Twitter @svopportunity
Related:
Opp Now enthusiastically welcomes smart, thoughtful, fair-minded, well-written comments from our readers. But be advised: we have zero interest in posting rants, ad hominems, poorly-argued screeds, transparently partisan yack, or the hateful name-calling often seen on other local websites. So if you've got a great idea that will add to the conversation, please send it in. If you're trolling or shilling for a candidate or initiative, forget it.