Study analyzes the impact of minimum wage hikes in CA

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Lethe200

Senior Member
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San Francisco Bay Area
What’s the impact of California’s minimum wage hikes? Economist behind new study says there’s consensus
SF Chronicle Oct 20, 2024
The URL is subscriber only, sorry: https://www.sfchronicle.com/personal-finance/article/fast-food-mininum-wage-increase-19836513.php

Did California’s $20 fast food minimum wage immediately cost the state jobs and lead to massive price hikes when it went into effect? Critics predicted it would. A new study says it didn’t. The Center on Wage and Employment Dynamics at UC Berkeley released research examining what impact the new requirement had in the first few months.

The study’s findings:
  • Wages increased by 18%
  • Employment numbers remained stable
  • Menu prices increased by only 3.7% — the equivalent of a 15-cent increase on a $4 burger.
The $20 hourly wage floor represents an increase of $4 per hour from the statewide minimum wage of $16 in California.

The increase went into effect April 1 of this year, and it applies only to fast food chains with at least 60 locations nationwide. On Wednesday, the minimum wage for health care workers in California rose to $18 to $23 an hour, depending on the employer. And in November, voters will decide whether to further increase the statewide minimum wage to $18 an hour. If Proposition 32 fails, it will increase to $16.50 an hour in January.



Michael Reich, a co-author of the study who’s a labor economist and a professor at UC Berkeley, said the minimum wage has been a consistent political football since Franklin D. Roosevelt signed America’s first one into existence in 1938. In the intervening decades of research on the subject, he said, meta-analyses of minimum wage studies have repeatedly found “minimal” negative impacts.



Another study examining California’s new $20 fast-food wage from researchers at Harvard and UC San Francisco found it increased pay without impacting staffing, scheduling or benefits. The study also said the minimum wage issue was largely settled by science: “The potential effect of minimum wage increases on employment has been extensively litigated in the economics research literature, with the verdict that negative impacts, if any, are not very substantial — and especially so in the service sector.”
 

Did it lift anyone out of poverty? 🤔

My issue with the minimum wage increase is that it draws people that were already making $18.00 - $23.00 and everyone above them closer to the entry level erasing what is often years of hard work to get ahead.

IMO in order to raise the minimum or entry level wage it should include a similar adjustment for each pay grade.

Sadly, in a year or two prices rise to match the increases and the net effect is little or nothing.

The only way for an individual to get ahead is through education and experience that sets them apart from other candidates for higher paying jobs.
 
I'm sure it helps Smug Karen, with her EV and eating premium chocolate ice cream from her $15,000 kitchen freezer.

After all, now she's even further ahead of the working and lower-middle classes she despises. All for the price of raises for the slacker class which she doesn't feel the impact of. She only patronizes trendy and upscale eateries and boutique shoe stores.
 

No one talks about CEO pay increases when we talk about minimum wage hikes. For example:

From 1978 to 2020, CEO pay grew by 1,322%,
From 1978 to 2020 compensation of the typical worker grew by 18.0% .
Average top CEO compensation was $13.9 million in 2020 (that's $6,682.68 per hour or $111.39 per minute).
(These statistics were posted by the Economic Policy Institute)

I wonder how many burgers (or gallons of gasoline, or whatever) need to be sold just to pay these CEOs.
This is why we need unions.
 
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Lethe200 said:
What’s the impact of California’s minimum wage hikes? Economist behind new study says there’s consensus
SF Chronicle Oct 20, 2024
The URL is subscriber only, sorry: https://www.sfchronicle.com/personal-finance/article/fast-food-mininum-wage-increase-19836513.php

Did California’s $20 fast food minimum wage immediately cost the state jobs and lead to massive price hikes when it went into effect? Critics predicted it would. A new study says it didn’t. The Center on Wage and Employment Dynamics at UC Berkeley released research examining what impact the new requirement had in the first few months.

The study’s findings:
  • Wages increased by 18%
  • Employment numbers remained stable
  • Menu prices increased by only 3.7% — the equivalent of a 15-cent increase on a $4 burger.
The $20 hourly wage floor represents an increase of $4 per hour from the statewide minimum wage of $16 in California.

The increase went into effect April 1 of this year, and it applies only to fast food chains with at least 60 locations nationwide. On Wednesday, the minimum wage for health care workers in California rose to $18 to $23 an hour, depending on the employer. And in November, voters will decide whether to further increase the statewide minimum wage to $18 an hour. If Proposition 32 fails, it will increase to $16.50 an hour in January.



Michael Reich, a co-author of the study who’s a labor economist and a professor at UC Berkeley, said the minimum wage has been a consistent political football since Franklin D. Roosevelt signed America’s first one into existence in 1938. In the intervening decades of research on the subject, he said, meta-analyses of minimum wage studies have repeatedly found “minimal” negative impacts.



Another study examining California’s new $20 fast-food wage from researchers at Harvard and UC San Francisco found it increased pay without impacting staffing, scheduling or benefits. The study also said the minimum wage issue was largely settled by science: “The potential effect of minimum wage increases on employment has been extensively litigated in the economics research literature, with the verdict that negative impacts, if any, are not very substantial — and especially so in the service sector.”
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Interesting, because to me it sounds like a win. I'm guessing that if you asked those who got a raise if they felt better off, they'd say "yes". It's not a cure-all, it's not going to wipe out poverty. But it helps.
 
2 effects that stick out to me:

1) My granddaughter worked at McDonald's and her roommate worked at Taco Bell. Both had their work hours cut after the raise. My g-daughter went from 24hrs/wk to 18 and her roommate went from 24hrs/wk to 15. The g-daughter said 4 other employees lost hours and those hours were given to employees who'd worked there longer.

While looking for other jobs, they got behind in their rent. Two months later they hadn't found other jobs yet, but found a pay-or-quit notice on their front door, and they moved back in with their respective parents.

2) The food went up in price....way up. On my way home from doing errands one day, I went to a Wienershnitzel drive-through to get a couple of corndogs....just 2 corndogs, no drinks and not a meal or combo. I was charged $11. :oops:
 
We seldom go to any "fast food" places....other than getting a small coffee at McDonalds when doing some shopping. As busy as their employees seem to be, I can see justification for a minimum wage increase. Anymore, we can eat at a restaurant for little more than what some of these FF places charge for a full meal.
 
Wages should be set by market forces, not government.

If one thinks government ought to set prices of wages, what else should government set prices for? How about cars? Homes? Food? Stocks? If government or citizens feel that something is too cheap or too expensive, is it their business to artificially and capriciously raise wages or set prices? If you said no, move to the head of the class. If you said yes, then North Korea might be a better fit.
 
Restaurant prices have gone through the roof! I don’t need a study (many are deceiving) to show me anything. The bottom line is I’m going way less and many others are doing the same. Closures will follow, that’s a guarantee.
 
ChiroDoc said:
Wages should be set by market forces, not government.

If one thinks government ought to set prices of wages, what else should government set prices for? How about cars? Homes? Food? Stocks? If government or citizens feel that something is too cheap or too expensive, is it their business to artificially and capriciously raise wages or set prices? If you said no, move to the head of the class. If you said yes, then North Korea might be a better fit.
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Letting corporations set wages (as you suggest) has resulted in fully employed people still having to go to food banks. Does that make sense? Like Walmart! A hugely profitable corporation who's workers still have to get help for food. Walmart workers increasingly rely on food banks, report says

And not only that, I saw an article praising Walmart for giving $2.6 million to the food banks in Alberta, except it's not coming from Walmart. It's still coming from me or shoppers because Walmart is always asking at the cashier, if I want to make a donation! But then they get the tax credit for being 'such good citizens'? And that corporation is still making massive profit while their staff go to the food bank. That's what happens when you let corporations set minimum wages. Walmart donation helps Alberta food banks
 
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Debrah N. said:
Letting corporations set wages (as you suggest) has resulted in fully employed people still having to go to food banks. Does that make sense?
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I think it depends on what you mean by "fully employed." It means something entirely different from "out of the house 40 hours each week."

This isn't a Kindergarten no matter how much you might wish it was. Whether competition is the tribe up the river, the family down the street, or whomever we can't just hand wave it away. Cooperation also requires a return of proportional contribution.

You can't operate an economy on the assumption that everyone is or should be allowed to act as if incompetent. Feeble members of a society are carried on the backs of the able.

Surely this is all self-evident to anyone who hasn't enjoyed a free ride through life?
 
dilettante said:
I think it depends on what you mean by "fully employed." It means something entirely different from "out of the house 40 hours each week."

This isn't a Kindergarten no matter how much you might wish it was. Whether competition is the tribe up the river, the family down the street, or whomever we can't just hand wave it away. Cooperation also requires a return of proportional contribution.

You can't operate an economy on the assumption that everyone is or should be allowed to act as if incompetent. Feeble members of a society are carried on the backs of the able.

Surely this is all self-evident to anyone who hasn't enjoyed a free ride through life?
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Fully employed means 8 hours, 7 days a week. Or at least they should be, instead of given only part time work so that more money winds up in corporate hands. Having multitudes of part time workers to avoid paying people what they're worth, is unfair and is simply greedy and selfish. As to the rest of your comment, I don't know what your meaning is. Who said anyone should be allowed to act as if incompetent?
 
Debrah N. said:
Fully employed means 8 hours, 7 days a week. Or at least they should be, instead of given only part time work so that more money winds up in corporate hands. Having multitudes of part time workers to avoid paying people what they're worth, is unfair and is simply greedy and selfish. As to the rest of your comment, I don't know what your meaning is. Who said anyone should be allowed to act as if incompetent?
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The reason for part timers is the Boss doesn't have to pay bumps and extras, Perks to them employees. Come on Kim nuke Cal, do all a favor.
 
Jocko said:
Restaurant prices have gone through the roof! I don’t need a study (many are deceiving) to show me anything. The bottom line is I’m going way less and many others are doing the same. Closures will follow, that’s a guarantee.
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Nobody is entitled to a restaurant meal that's subsidized by the workers.
ChiroDoc said:
Wages should be set by market forces, not government.

If one thinks government ought to set prices of wages, what else should government set prices for? How about cars? Homes? Food? Stocks? If government or citizens feel that something is too cheap or too expensive, is it their business to artificially and capriciously raise wages or set prices? If you said no, move to the head of the class. If you said yes, then North Korea might be a better fit.
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.gov set a floor, a minimum, and that's what .gov is for, which it's done for a long, long time. Employers are free to pay as much as they would like.
 
dilettante said:
Cooperation also requires a return of proportional contribution.
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Well we're waiting on that return, until then .gov is going to play a role in determining the minimum wage.


dilettante said:
Feeble members of a society are carried on the backs of the able.
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Well duh. That's what a fully functioning society is.
 
ChiroDoc said:
Wages should be set by market forces, not government.

If one thinks government ought to set prices of wages, what else should government set prices for? How about cars? Homes? Food? Stocks? If government or citizens feel that something is too cheap or too expensive, is it their business to artificially and capriciously raise wages or set prices? If you said no, move to the head of the class. If you said yes, then North Korea might be a better fit.
Click to expand...
Wall Street is setting the prices for housing these days. That's not working out so well for anyone but investors.
 
againstthegrain said:
Nobody is entitled to a restaurant meal that's subsidized by the workers.

.gov set a floor, a minimum, and that's what .gov is for, which it's done for a long, long time. Employers are free to pay as much as they would like.
Click to expand...
Employers pay as little as the supply and demand of workers will allow. Without a minimum wage, in tough times, they'd be paying slave wages, like during the Gilded Age. With the minimum wage, if that's more than they want to pay, they move their operations overseas where they can pay slave wages. It puts people here out of work.

What's the answer? Tariffs? Excessive profits taxes?
 


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