@TBPInvictus right here:
In case you’re not conscious of the brouhaha that was stirred a couple of 12 months or so in the past when CA Gov Gavin Newsom signed into legislation (taking impact April 1, 2024) a brand new $20 minimal wage for so-called “restricted service” (a/ok/a quick meals or QSR) restaurant employees, learn up right here, right here, or right here.
In a nutshell, the standard suspects’ heads exploded effectively earlier than the laws even took impact, claiming it could result in widespread devastation within the quick meals house: job losses, restaurant closures, excessive value hikes, and so forth. We’ve seen this occur each time the minimal wage rises—numerous sound and fury that, in the long run, signified nothing.
It started with some shoddy reporting on the Wall St. Journal, which appeared to unquestioningly reprint business press releases. Even worse, the reporter concerned is outwardly unfamiliar with how Seasonal and Nonseasonal adjusted information works, making an embarrassing Economics 101 error that any freshman school pupil ought to have caught. The error then unfold to the Hoover Establishment, then a CA group known as CABIA, the NY Put up and, in fact, Fox Information.
Motivated reasoning is a strong supply of media error.
All the episode is paying homage to what occurred in Seattle a decade in the past, which this web site painstakingly debunked in nice element.
We all know that quite a few tutorial research have proven that the majority dire forecasts which are made about elevating the minimal wage don’t come to cross. And now comes the primary such research concerning the hike in California. Reduce to the chase:
We discover that the sectoral wage customary raised the typical pay of non-managerial quick meals employees by almost 18%, a remarkably massive improve when in comparison with earlier minimal wage insurance policies. Nonetheless, the coverage didn’t have an effect on employment adversely. It did improve quick meals costs, on a one-time foundation solely, by about 3.7%, or about 15 cents for a $four merchandise. Shoppers, due to this fact, absorbed about 62% of the fee will increase. These results are benign. Nonetheless, restaurant revenue margins probably fell, and the royalty charges restaurant operators pay to franchisors probably elevated.
As specified by a press launch from Newsom’s workplace:
- Wages elevated by 18% – For 90% of non-managerial employees, wages elevated by 18%, representing a significant bump for employees who’ve traditionally been underpaid regardless of many being the first breadwinners of their households.
- No job cuts – The wage improve didn’t result in job cuts, regardless of what critics had mentioned can be a doomsday for the business.
- Revenue margins had been already excessive – The business had been benefiting from “monopsonistic (increased than aggressive) revenue margins” which have “absorbed a considerable share of the fee improve.”
- 15 cents – The price of menu choices rose by solely 3.7%, which is roughly simply 15 cents for a typical $four hamburger.
There could be little question that this battle can be fought once more. And once more. And once more. And once more. However we additionally know what the probably final result can be, as a result of we’ve already seen this film a number of occasions.
Till subsequent time.
Beforehand:
Seattle Redux: Misunderstanding Seasonal Changes (June 10, 2024)
Debunking QSR Minimal Wage BS: A Observe Up (June 13, 2024)
Sources:
Sectoral Wage-Setting in California
Michael Reich and Denis Sosinskiy
IRLE Working Paper No. 104-24.
UC Berkeley, 2024
California’s $20 Quick-Meals Minimal Wage Is a Win-Win-Win, Analysis Says
Governor’s Workplace, Oct 3, 2024
California Eating places Reduce Jobs as Quick-Meals Wages Set to Rise
“Chains lay off employees, shave hours forward of state minimum-wage improve”
By Heather Haddon
WSJ, March 25, 2024
The fast-food business claims the California minimal wage legislation is costing jobs. Its numbers are pretend.
by Michael Hiltzik
L.A. Occasions, June 12, 2024 (Free mirror: Yahoo)
