Listen: Tom Manzo, president and founder of the California Business and Industrial Alliance.
The California Business and Industrial Alliance (CABIA) ran a full-page ad in USA Today calling out Governor Gavin Newsom for the job losses that have resulted from the state's fast-food minimum wage hike.
The ad shows that fast food jobs have dropped from 742,277 in January of 2024 to 736,861 in August 2024, citing an analysis from the Employment Policies Institute. The ad notes that while the Governor and his media team continue to "deny reality," thousands of jobs are still at risk in California.
"The Governor needs to wake up to the fact that his fast food minimum wage hike is a disaster," said Tom Manzo, president and founder of the California Business and Industrial Alliance. "Overregulation and high-costs in California have made running a business nearly impossible. This wage hike is the final nail in the coffin for so many business owners who were already struggling to stay afloat. Newsom needs to face the reality of this misguided legislation and find a solution that rolls back his job-killing policy."
Here's what the Governor's Office says:
“California’s $20 Fast-Food Minimum Wage Is a Win-Win-Win, Research Says”
What you need to know: UC Berkeley economists’ study shows that raising the minimum wage increased incomes for workers, with no job cuts and food prices remaining largely stable.
SACRAMENTO – A new study published by UC Berkeley’s Institute for Research and Labor Employment confirmed that California’s $20 minimum wage for fast-food workers has led to significant benefits for workers, without the devastating consequences that critics predicted. The study found that while wages have risen substantially, there has been no reduction in employment in the fast-food sector. Below are some key takeaways from the research:
- Wages increased by 18% – For 90 percent of non-managerial workers, wages increased by 18 percent, representing a meaningful bump for workers who have historically been underpaid despite many being the primary breadwinners in their families.
- No job cuts – The wage increase did not lead to job cuts, despite what critics had said would be a doomsday for the industry.
- Profit margins were already high – The industry had been benefiting from “monopsonistic (higher than competitive) profit margins” which have “absorbed a substantial share of the cost increase.”
- 15 cents – The cost of menu options rose by only 3.7 percent, which is roughly just 15 cents for a typical $4 hamburger.