(NewsNation) — California’s 2024 pay increase for fast-food workers cost the state roughly 18,000 jobs, according to a new report by the National Bureau of Economic Research.
NBER reports that the pay bump from $16 to $20 an hour appears to have backfired on employees, with the state’s fast-food sector experiencing a decline in employment by 2.7% or 18,000 jobs, compared to other parts of the country.
The pay increase took effect in April 2024 as part of legislation aimed at improving working conditions and offsetting the rising costs of living in the state.
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Almost immediately, consumers started to notice price hikes at popular fast-food chains in the state, including Chick-fil-A, Wendy’s and Chipotle. Franchise owners began cutting back on employee hours to offset the jump in labor costs. According to the Competitive Enterprise Institute, 89% of California’s fast-food workers have had their hours reduced.
Currently, the state ranks third for the highest unemployment rate in the country at 5.3%.
