Governor Gavin Newsom’s office faces accusations of misrepresenting job data after implementing a $20 per hour minimum wage for fast-food employees in California. Despite official claims of job growth, evidence points to significant job losses and heightened automation in the fast food industry. According to the California Business and Industrial Alliance (CABIA), nearly 10,000 fast-food jobs have been lost since the wage hike was signed into law late last year.
This data contradicts the optimistic portrayal from Newsom’s PR team, which continues to assert that the state has seen consistent job growth in the sector. Brandon Richards, Deputy Director of Communications for Governor Newsom, recently requested a retraction, asserting that job numbers have increased since the $20 wage was enacted. He cited data indicating that July marked the fourth consecutive month of job growth under the new law, claiming the fast food industry is at its highest employment level ever.
However, independent economist Rebekah Paxton, who holds advanced degrees from Boston University, contends that the administration is cherry-picking data to present a misleadingly positive narrative. “Newsom is stretching the truth to obscure the obvious: His fast food minimum wage hike has been disastrous. Thousands of workers have lost their jobs, hours are being slashed, and restaurants are closing at an alarming pace,” Paxton stated.
Paxton further clarified that using non-adjusted data sets skews the reality of the situation. Her analysis revealed that California has lost 3,000 fast-food jobs since January 2024.
Misrepresented job data in California
“Despite what the administration claims, there have been significant job losses in six out of the seven months since the wage increase was signed into law,” she explained. Additionally, federal job data from the U.S. Bureau of Labor Statistics and the Federal Reserve Bank of St. Louis indicates that this job loss trend is unique to California.
Fast food job numbers in neighboring states, such as Oregon and Nevada, have been growing, suggesting that California’s job losses are directly tied to the emergency $20 wage policy. In an interview, Paxton said that these job losses were expected and are now being borne out by the data. “The administration’s statistics don’t hold up,” she said.
“Since the beginning of 2024, California’s fast food employment has shrunk substantially, which contrasts sharply with job gains in similar sectors in neighboring states.”
Consumer reactions have been varied. Some California residents report experiencing longer wait times and increased automation in fast-food establishments, likely as a result of the labor cost increases. Hector Marquez of Santa Clara remarked, “Basic economics and common sense predicted this outcome.
With higher wages, employers cut jobs and move to automation.”
Despite Newsom’s office’s claims, the measurable impact of the wage increase on the fast food industry appears to show a shrinking job market, increased automation, and growing financial pressure on small businesses unable to compete with larger chains. The debate over the impacts of the wage hikes continues, with stakeholders from both sides calling for clearer and more transparent reporting of job data and economic trends in California.
