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California's $20 fast-food minimum wage improves pay at small cost to consumers
- deleted 1y ago[deleted]
- changoplatanero 1y agoHmm I saw a different analysis recently indicating that there was a large reduction in fast food jobs in California after the raise to $20/hr. Which one is right?
- Frieren 1y agoShare your other analysts so we can take a look.
- greenchair 1y agohttps://gosnappy.io/blog/fastfood-closures-california/ https://gosnappy.io/blog/fastfood-closures-california/
- slater 1y agoThose tables seem a bit... odd? Are we led to believe that between January and February, no fast food restaurants closed? Not a single one? And same for July and August? Also, a gold star for prominently featuring the totals cumulatively, oooo scary number go up! I did the needful: https://i.imgur.com/OziGDLg.png https://i.imgur.com/OziGDLg.png
- ec109685 1y agoThe first studies that came out failed to adjust for seasonality. “Here’s the problem with that figure: It’s derived from a government statistic that is not seasonally adjusted. That’s crucial when tracking jobs in seasonal industries, such as restaurants, because their business and consequently employment fluctuate in predictable patterns through the year. For this reason, economists vastly prefer seasonally adjusted figures when plotting out employment trend lines in those industries.” https://www.latimes.com/business/story/2024-06-12/the-fast-food-industry-claims-the-california-minimum-wage-law-is-costing-jobs-its-numbers-are-fake https://www.latimes.com/business/story/2024-06-12/the-fast-f...
- addoo 1y agoUnimportant detail: The prices in the image in the article are 48% lower than the prices at my local California In-n-Out.
- digianarchist 1y agoThat image is 11 years old
- knowitnone 1y agoit is manipulative to show a picture that is not contexual. Would it be too hard to get a recent picture with recent prices?
- hnburnsy 1y agoHere is a better article with competing studies... https://calmatters.org/commentary/2025/02/fast-food-minimum-wage-studies/ https://calmatters.org/commentary/2025/02/fast-food-minimum-... >On Tuesday, the industry released its own impact study, conducted by the Berkeley Research Group, a private consulting firm. It found that wage increases have reduced fast food employment, shortened the hours worked, compelled fast food franchises to use more automation and resulted in markedly higher consumer prices.
- giraffe_lady 1y ago> It found that wage increases have reduced fast food employment, shortened the hours worked, compelled fast food franchises to use more automation The wage increase is the agent here? More correct to say that owners did these things in response.
- pbh101 1y agoOne is a trigger to an otherwise steady-state dynamic system. I don’t think unreasonable to ask what effect a policy change had, net all the choices each agent has and takes in response to the change.
- qcic 1y agoPotato - potato. Doesn’t really matter that it was a response, the chain of events is still the same, so are the results. It the end of the day, just one more example of unintended consequences of legislation.
- yellowapple 1y ago> the chain of events is still the same Ignoring the link in that chain wherein corporations chose to take various unnecessary and punative measures as retaliation against having to pay their workers more is intellectually dishonest, at best.
- db48x 1y ago
- georgeburdell 1y agoThe fast food chains seem to have a bifurcated response. Some, like McDonalds, seem to have cut crew, while retaining relatively low prices, so service is generally quite poor now. Others, such as Chick-fil-A, raised their prices, and a plain chicken sandwich at my local franchise is now about $7. Edit: In-N-Out Burger is the only one I can think of with low prices and good staffing. It is also privately owned
- ec109685 1y agoChick-fil-A raised their prices everywhere, so it can’t just be because of this law: “That's right: A year ago, in January of 2023, Chick-fil-A implemented a 6% price increase on all menu items. The previous year, their signature sandwich increased in price by 15%. That means your favorite chicken sandwich is now significantly pricier than it was just two years ago” https://www.shefinds.com/collections/chick-fil-a-inflation/ https://www.shefinds.com/collections/chick-fil-a-inflation/
- dismalaf 1y agoCompare restaurant price increases over the last 20 years to that of the overall economy. Or especially to something like housing. Restaurants are currently incredibly cheap.
- crooked-v 1y agoThat's a bad comparison because the much more important factor is that housing is incredibly and disproportionately expensive right now, not becuase that's the 'natural' state of the economy, but because almost every major US city has made it expensive to build housing and impossible to build middle-density housing. Or in other words, your 'cheapness' comparison is only against a self-inflicted artifical high point.
- dismalaf 1y agoOk, then compare it to grocery prices. Or other forms of entertainment like tickets to professional sporting events. Or concerts, movies. Restaurants are cheap.
- kgwxd 1y ago[flagged]
- ajross 1y agoNo? $20US/hour is higher than any national wage floor currently, wikipedia unsurprisingly has a great list at https://en.wikipedia.org/wiki/List_of_countries_by_minimum_wage https://en.wikipedia.org/wiki/List_of_countries_by_minimum_w... Even in PPP units (which subsumes both your points) California beats everyone in that list but Argentina (which has some kind of craziness in its PPP scaling I don't understand). The next closest is the Netherlands at ~$17. I mean, it really shouldn't be surprising to point out that California is really fucking wealthy.
- yellowapple 1y agoI wonder if that changes if you factor in the value of public services people receive? I'm sure the Dutch have better government programs w.r.t. healthcare and other essential services than we Americans do.
- ajross 1y agoPPP includes a lot of that, but not healthcare (the analysis for which is really complicated because it's not like you just pay one number and add it up, outcome curves matter, etc...). A closer number is "disposable income", which is the money a household has leftover after essentials. But that can't be measured with a hourly wage number, and AFAIK no one has tried to measure it specifically for "fast food workers in California", the numbers you see tend to be for medians, so somewhat higher up the scale. But yes: the USA does really well on disposable income metrics too. It's not popuular to point out given all our recurrent shitstorms, but in fact Americans are, yeah, really fucking wealthy.
- testing22321 1y agoYes of course, but profits are lower. And if there is anything more taboo than sex on tv in the US, it’s reducing profits.
- llmguy 1y ago2 things can be true 1) Investors might earn too much return on their investment and wage inequality is high. 2) This study ignores downstream effects that result from the lower returns for ongoing/new investment. Since they’re now paying more for labor and selling less, new investment and upkeep has a lower return. Less store upgrades less new restaurants less expansion and so on. In the short term though, of course wage growth (inflation) feels good.
- deleted 1y ago[deleted]
- worik 1y agoThat was my first thought, too. This is being paid for by reduced profit Good
- deleted 1y ago[deleted]
- hayst4ck 1y agoI don't accept this at face value. I'm open to this line of reasoning, but can you prove it or provide evidence that there's something to it? I also think there is a counter point that now fast food laborers have more money to spend on fast food or other businesses that provide goods or services that help grow the economy. The more I think about it, the more it sounds like you are defending trickle down economics, which is literally a turd of a theory... It's other name is Horse and Sparrow economics. If the horse eats enough oats, then sparrows can survive of its droppings.
- llmguy 1y agoI think if you're looking for proof you're setting too high a standard. But Seattle's experiment hasn't gone well AFAIK. Higher wages = less hours to go around = less money, less economic output, less investment, and so on. https://evans.uw.edu/faculty-research/the-minimum-wage-study/ https://evans.uw.edu/faculty-research/the-minimum-wage-study... https://www.aeaweb.org/articles?id=10.1257/pol.20180578 https://www.aeaweb.org/articles?id=10.1257/pol.20180578 "Relative to outlying regions of the state identified by the synthetic control method, aggregate employment at wages less than twice the original minimum—measured by total hours worked—declined." On the other hand, taxing restaraunts with unhealthy food and forcing that money to go to low income workers maybe isn't so bad. I think NYC taxes soda directly for instance. Imagine if they forced that money to go to workers.
- greenchair 1y agoYeah, no. My restaurant owner friend said during <he who shall not be named> crazy inflation when complaining about skyrocketing food costs: "theres only so much money people are willing to spend for a salad". Also why is axios' article format so demeaning? The info is presented like it is written for 3rd graders.
- aaronbrethorst 1y agoThe axios format is called “smart brevity” and it makes me so frustrated. https://www.axios.com/smart-brevity https://www.axios.com/smart-brevity
- vondur 1y agoI wouldn't call it a "small cost." Most fast food meals are at least $15 now. McDonald's just opened a new location here — no dine-in or counter service at all. It's partly because of crime, but also because they don’t need to hire as many people to maintain a dining area. On the bright side, I guess I’m eating out a lot less now.
- toomuchtodo 1y agoPrice went up ~1.5%. That is objectively a small cost. > While menu prices did increase, costs rose by an average of just 1.5% –equivalent to about 6 cents on a $4 hamburger, down from the 15-cent increase reported in the September study. McDonald's gross profit for the twelve months ending December 31, 2024 was $14.710B. https://corporate.mcdonalds.com/corpmcd/our-stories/article/Q4-full-year-2024-results.html https://corporate.mcdonalds.com/corpmcd/our-stories/article/...
- vondur 1y agoNot I'm my area.I've seen combos that used to be $8 are now $10 or more. I was pleasantly surprised that Del Taco released a new box combo that's only $5.99.
- theklahomate 1y ago[flagged]
- robomartin 1y agoThis article is a complete fabrication. Jobs have been lost. Businesses have seen a reduction in sales due to having to raise prices. People don't tip at all now or tip very little. Full time jobs are shifted to be part time. Etc. As is always the case with these policies, the people who were promised better outcomes are the ones who suffer. Everything is more expensive. On top of that, CA has a fetish with taxation, which means your $20 per hour likely has the buying power you had when you were earning $10, if not less. We pay nearly $5 per gallon for gasoline when, in other parts of the nation the prices are around $2.50. It's all taxes and over-regulation. Insurance (car and home) is crazy expensive. Everything is expensive. I am not sure how far we are from what I've been calling a "Javier Milei" moment in CA. The moment when the population finally suffered enough to understand reality and put people in office who will actually do what they are supposed to do. New one: They are pushing for a mileage tax on vehicles. The excuse is that revenues have come down due to electrics. This is a lie. Only about 5% of the vehicles in CA are EV's. Furthermore, the road maintenance taxes we pay on fuel have AUTOMATIC annual increases built in. And yet, I have been to third world countries who's road are better maintained than in CA. It's truly embarrassing and criminal. The money is being diverted to things other than road maintenance. In short, this article is completely disconnected to reality on the ground.
- robomartin 1y ago[flagged]
- casey2 1y agoWhy do you go on the internet at lie? Anybody can look up fast food employement rates in california and see that you are just bullshiting. California has more fast food jobs now than at any point in it's history. Mcdonalds has already recovered from it's fool's day blip. I just don't understand why Americans want a race to the bottom on their food/food service quality. Apparently at the expense of growth.
- s1artibartfast 1y ago>Why do you go on the internet at lie? Anybody can look up fast food employement rates in california and see that you are just bullshiting. genuinely looking for a Source? On BLS I see see California employment numbers are down. https://data.bls.gov/cew/apps/table_maker/v4/table_maker.htm#type=17&from=2023&to=2024&qtr=1&own=5&ind=722513&area=06000&supp=1 https://data.bls.gov/cew/apps/table_maker/v4/table_maker.htm...
- sunshinerag 1y agoWhy $20? Why not 50$
- vishalontheline 1y agoAt $20, you'd earn a roughly $40k salary if you were to work full-time. That won't buy you a house, but it will let you rent a room in a house within commuting distance from your place of work, maybe drive an old beater Camry, cook your own food, and have some money saved up for school. Why not $50, that's a $100k salary - most people would be opposed to it because you'd be able to potentially afford much more than what they perceive a fast food worker should be able to afford.
- bigtex 1y agoDo we have logic behind why they chose $20 and not $50?
- nine_k 1y agoYou pay $7 for a burger now? Why not $15? I mean, if the customers won't mind, and agreed to pay much more, the wages could also grow much more.
- casey2 1y agoWhy are you pulling random numbers out of your ass? If a worker makes 60 burgers in an hour and they are paid $20/hr then that adds 33 cents to the price of a burger that assembles itself. If they are paid $50/hr then 83 cents. Math isn't hard and politics poisoned your brain.
- upsuper 1y agoExcept it is hard to imagine there to be enough demand all the time to sustain this for every hour they work, and even in case there is, they would be happy busy making so many burgers for maybe eight hours in a row each day. And let's not ignore that making food is also not the only work for those working in a restaurant.