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California raised pay – and thousands of people lost jobs. Wake up, liberals! | Opinion
Minimum wage hikes sound good. But forcing private employers to increase their business expenses through higher wages often leads to unintended – and harmful – consequences.
Minimum wage hike to go into effect for some across US
Workers in several states and cities will see minimum wage increases go into effect on January 1, 2025, as they continue to battle with high prices.
Perhaps California Gov. Gavin Newsom thought the $20 minimum wage hike he signed into law last year for most fast-food workers would magically skirt the principles of free-market economics.
If so, he was wrong.
The Democratic governor clearly buys into the progressive fallacy that government intervention in the private economy will yield positive results.
It usually doesn’t.
The law took effect in April, and in a 10-month period since the mandate kicked in, the Golden State shed more than 6,000 jobs. That’s roughly a 1.1% drop in fast-food employment, according to an analysis of federal labor data.
In contrast, during the same timeframe a year earlier (before the law was passed), the California fast-food industry experienced a 3.1% increase in employment, adding more than 17,000 jobs.
While California was losing jobs, U.S. fast-food restaurants added roughly 74,000, a growth of 1.6%, during this period, according to an analysis by the nonprofit Employment Policies Institute, which advocates against government-mandated higher wages.
“Newsom took a sledgehammer to the state’s restaurants when he signed the $20 fast food minimum wage law,” Rebekah Paxton, EPI’s research director, said in a statement. “Jobs have been smashed by thousands and the industry is struggling to stay afloat.”
2025 will bring a slew of new minimum wage hikes
California’s job losses were 100% predictable. In fact, the state already started to lose hundreds of fast-food jobs before the law took effect, according to The Wall Street Journal.
Higher wages sound nice and are often sold by liberals as a way to improve workers’ quality of life. Who doesn’t want a bigger paycheck?
Yet, forcing private employers to increase their business expenses through higher wages often leads to unintended – and harmful – consequences. That can include reduced hours and benefits, more automation and lost jobs. Higher prices for customers are also a downside.
One of the most serious consequences, however, is that higher minimum wages harm entry-level workers who are trying to get first-job experience. If employers don’t have leeway in wage scales, they will go with more experienced workers.
Despite these logical outcomes, 21 states and many other cities and counties are set to raise their minimum wages on Jan. 1. Others will follow later in the year. Many of these wages will be $15 an hour or higher.
Meanwhile, the federal minimum wage remains at $7.25.
Once these new pay bumps take effect, it will be another opportunity to see the real-life impact of forced wage increases.
Some good news: Californians reject another wage increase
The presidential election last month proved to be largely about the economy, and it turns out even voters in California have become wary of higher minimum wages.
Voters there rejected a ballot measure that would have gradually raised the minimum wage to $18 an hour for all jobs, the highest in the country. It’s the first time in the United States in nearly 30 years that a statewide ballot measure to raise the wage has failed
Similarly, voters in Massachusetts decisively voted down a measure that would have raised the wages of tipped workers to the minimum wage.
In a statement, Jennifer Barrera, CEO of the California Chamber of Commerce, said the California proposal would have resulted in “higher costs for small business employers and consumers.”
“With the economy and costs top of mind for many voters this election, that message appears to have resonated,” she said.
Liberals claim to want to help people. But they need to be aware of the real-life implications of their nice-sounding ideas.
Ingrid Jacques is a columnist at USA TODAY. Contact her at ijacques@usatoday.com or on X: @Ingrid_Jacques
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