Following California implementing a law raising its minimum wage to $20 for more than 500,000 fast-food workers in the state in 2024, Christopher Thornberg, founding partner of research firm Beacon Economics, offered a warning about the state raising its minimum wage.
“California’s well-intended push to reduce income inequality via wage floors is beginning to have a significant negative impact on some of our most vulnerable workers—our youth, particularly those from lower-income households,” he wrote earlier this year.
His concerns echoed those of fast-food franchise owners, one of whom told Fortune in 2024 that higher wages would be unsustainable for smaller chains with slim margins.
But nearly two years after the law’s passage, economists are seeing very different results than what was initially feared. A working paper from University of California at Berkeley released this month found the policy increased average weekly wages for eligible workers by 11% and did not reduce employment. Prices increased modestly, about 1.5%, or the equivalent of about six cents for a $4 item.
I’ll tack on the corporate landlords pricing out businesses as well. Some businesses might not have jacked up prices so much if they didn’t have sky-high rents. Imo, corporations should be leasing land from the government; there doesn’t necessarily need to be private ownership of these commercial properties.