The California Governor’s Office is pushing back on the findings of a July 2025 study published by the National Bureau of Economic Research (NBER). The study reports that California’s 2024 minimum wage increase to $20 for fast food workers cost the state 18,000 jobs.
Gov. Newsom’s deputy director of communications Tara Gallegos disputed the findings of the piece, adding that the research paper was linked to the Hoover Institution, a public policy think tank she claimed has published “false or misleading information” about California’s minimum wage hike “that later had to be completely retracted.”
The California Assembly passed Assembly Bill (AB) 1228 in September 2023, which raised the minimum wage and formally established the “Fast Food Council” and its ability to set and adjust the industry’s minimum wage which was $16 at the time. The bill, authored by former Assemblymember Chris Holden (D- Pasadena), a member of the California Legislative Black Caucus, was signed into law by Gov. Gavin Newsom and went into effect on April 1, 2024.
Holden, who represented the 41st Assembly district until terming out last year, also played a key role in brokering a deal between supporters and opponents of the bill, aiding its passage.
Jonathan Meer, a researcher at the NBER, spoke with California Black Media about the organization’s motivations for publishing the report and defended the study’s methodology and transparency.
“We worked on minimum wage issues for some time, and we have concluded that relatively small increases are unlikely to have major impacts on employment levels in the short run,” said Meer. “But the California fast food increase was quite large – well outside the bounds of anything we’ve seen previously – and it made for an interesting case study.”
Meer acknowledges the governor’s office’s criticism of the study but insists NBER took the right approach. He even hinted that jobs lost due to the increases could be higher.
“That’s why our figures start with the raw data plots and show each adjustment we made, explaining clearly how and why it was done. Most of those adjustments are ones that minimum wage proponents in the academic literature have argued are crucial to ensuring that the right comparisons are being made. We produced an array of estimates based on those adjustments, and our “headline” number [18,000 jobs lost] is the median estimate – even if we think that the relatively larger ones (based on additional adjustments for data comparability) are more likely to be correct.”
Another study, conducted by the Institute for Research on Labor and Employment at UC Berkley, found “estimated wage increases of 8 percent to 9 percent for workers covered by the policy; no spillovers to non-covered workers; no negative effects on fast-food employment; and price increases of about 1.5 percent — or about 6 cents on a four-dollar hamburger.’ Additionally, the number of fast-food establishments grew faster in California than in the rest of the U.S.
Julieta Garcia, a Pizza Hut employee in Los Angeles, said she “had to choose between paying my rent or paying my bills” before the pay increased last spring.
Across California, nearly 80 percent of fast-food workers are people of color and about two-thirds of them are women, according to the California Fast Food Workers Union. And the nonpartisan Legislative Analyst’s Office (LAO) reports that fast food workers – cooks, cashiers and counter workers — make up the second largest group of low wage earners in California, behind home care aides.
