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.
Economists are by and large the worst for making predictions, because they’re social scientists who think they’re mathematicians. Not sure I’ve ever seen an economist ‘warning’ about the implementation of left wing ideals turn out to be right.
just because they can do a little statistics we shouldn’t make too much fun. well okay we should but we need to know the right lingo: they have ignored the general equilibrium issues you can pretty much just say that and be right