Study Claims NO Job Losses – REALLY?

California’s $20 fast food minimum wage “miracle” is a taxpayer-funded propaganda campaign designed to hide the devastating job losses hitting the industry.

At a Glance 

  • UC Berkeley released a suspiciously rosy government-funded study claiming the $20 minimum wage had “no job losses” despite widespread industry reports to the contrary
  • The study conveniently cherry-picks data to support Governor Newsom’s political agenda while ignoring real-world impacts on businesses
  • Fast food franchisees have been cutting hours, eliminating positions, and automating jobs since the wage hike took effect
  • Berkeley researchers claim only a 3.7% menu price increase despite obvious double-digit price hikes across the state
  • Independent studies and industry reports contradict the government’s narrative of success

Government-Funded “Research” Peddles Political Fantasy

Just when you thought California couldn’t get more detached from economic reality, along comes a taxpayer-funded study from UC Berkeley claiming that forcing fast food restaurants to pay $20 per hour hasn’t hurt employment. The state-sponsored propaganda piece, released conveniently before election season, suggests that magically raising labor costs by 18% overnight had zero negative consequences – a claim that defies basic economic principles and contradicts what business owners across the state are actually experiencing.

The Berkeley study’s lead author, Michael Reich, boldly claims with a straight face that the government can arbitrarily dictate massive wage increases without any job losses. It’s the kind of “research” that makes sense only if you’ve never run a business, balanced a budget, or studied Economics 101. Meanwhile, Governor Newsom is trumpeting these findings like they’re the economic equivalent of turning water into wine – miraculous and beyond questioning. 

The Reality Check: Jobs Are Disappearing

While the Berkeley academics were busy massaging data in their ivory tower, actual business owners across California have been making painful cuts. Numerous franchisees report reducing staff hours, eliminating positions, and accelerating automation investments just to stay afloat. The claim that employment hasn’t dropped conveniently ignores that most businesses didn’t fire everyone at once – they simply stopped replacing workers who left, cut hours across the board, or invested in kiosks and mobile ordering to reduce future hiring needs. 

“We find that a carefully implemented sectoral wage floor can raise worker pay without reducing the number of jobs or substantial consumer cost burdens”, says Michael Reich.

Notice the careful wording here – “carefully implemented” is doing a lot of heavy lifting in that statement. It’s a hedge that allows them to claim success while actual franchisees struggle with skyrocketing labor costs. And isn’t it curious how the study’s conclusion perfectly aligns with what Governor Newsom and his union backers wanted to hear? Just a coincidence, I’m sure – much like how the study was released right before an election cycle when Democrats need to convince voters their economic policies aren’t destroying businesses. 

The 3.7% Price Increase Fantasy

Perhaps the most laughable claim in the Berkeley study is that menu prices only increased by 3.7% as a result of this massive wage hike. Anyone who’s actually purchased fast food in California recently knows this is demonstrably false. When labor costs represent 25-30% of operating expenses and suddenly jump by nearly 20%, it’s mathematically impossible for prices to rise by just pennies. Fast food chains across the state have implemented double-digit price increases, with many value menu items disappearing entirely.

Notice how Newsom’s celebratory proclamation conveniently ignores wage compression effects, where experienced managers now make barely more than new hires. It also glosses over the reduced hours many workers now face, meaning their weekly paychecks haven’t seen the promised windfall. The law of unintended consequences doesn’t care about your good intentions, Governor. When you artificially distort markets, people adjust their behavior – especially business owners fighting to survive under California’s crushing regulatory burden. 

The Ultimate Economic Fantasy

The truly impressive feat of this Berkeley study is how it manages to defy basic economic principles that have been proven reliable throughout human history. Apparently, in California’s progressive utopia, dramatically increasing the cost of labor magically has no effect on demand for that labor. It’s economic alchemy that would make even Karl Marx blush. Meanwhile, teenage unemployment in the state continues to rise, entry-level positions disappear, and automation accelerates – all while government-funded academics declare victory.

The real damage will become clearer over time as fewer new fast food locations open in California, existing locations reduce operating hours, and fewer young people get their crucial first jobs in the industry. But by then, the politicians who championed this “miracle” will have moved on to their next economic experiment. For now, they have their state-funded study to wave around while ignoring the economic carnage happening right before our eyes. This isn’t just bad policy – it’s propaganda masquerading as research. 

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