The $20-an-hour wage floor foisted on California's fast-food restaurants, dubbed with the innocent-sounding moniker Assembly Bill 257, was signed into law last fall.
"Between last fall and January," Ohanian wrote, "California fast-food restaurants cut about 9,500 jobs, representing a 1.3% change from September 2023." By comparison, overall employment in California during that period fell just 0.2%. Those who are losing their jobs in this new higher-wage environment are those most easily replaced, with the lowest productivity - which usually means minority youths with minimal education and little or no work skills.
The SEIU, which had used "Strikes" at 450 fast-food locations to show they mean business, basically extorted the fast-food chains.
In California the median hourly wage in fast-food enterprises was about $14 an hour, with essentially no workers earning the national minimum, which is almost half less.
Why? "The consensus among economists is that 1% to 2% of entry-level jobs are lost for every 10% increase in the minimum wage," writes David John Marotta at Forbes.
"Raising the minimum wage from $7.25 to $15 could mean a reduction in entry level jobs of 11% to 21%. These estimates would suggest between 1.8 and 3.5 million of jobs lost." That's why.
Here's a modest alternative proposal that would benefit everyone, but especially low-end workers: No minimum wage at all, neither in California nor in the rest of the U.S. Then, everyone who wants a job will have one, and businesses won't have to hire robots instead of people.
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