UNEXPECTEDLY! California’s $20 minimum wage for fast-food workers led to ‘negative outcomes,’ researchers say.

Researchers found that California’s minimum wage hike for fast-food workers led to “negative outcomes” such as automation and reduced work hours.

The researchers at the University of California, Santa Cruz suggested in a report published in March that the policy could produce unintended consequences such as an increase in menu prices, a loss of overtime and benefits, reductions in employee working hours, and an implementation of automation that replaces workers.

The minimum wage for workers was $16 before the $20 minimum wage for fast-food workers became law in April 2024. Gov. Gavin Newsom said in September 2023 the increase would help workers earn more as the cost-of-living rises.

“The results indicate a plethora of negative outcomes such as higher menu prices for consumers, reductions in employee working hours, widespread elimination of overtime and loss of benefits for employees,” said Stephen Owen, an economics lecturer, University of California, Santa Cruz.

“Further decreases in employee opportunities are being driven by automation and the adoption of labor replacement technologies is accelerating.”

The real minimum wage is always zero.