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Column: The latest info on California's $20 minimum wage for fast food workers — higher pay, no job losses and minimal price hikes

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Column: The latest info on California's  minimum wage for fast food workers — higher pay, no job losses and minimal price hikes

Which of California’s economic initiatives droves conservatives batty the most? No question: It’s the state’s $20 minimum wage for fast food workers, which went into effect April 1.

For months before the wage increase, conservative pundits and economists filled the airwaves and newspaper columns with predictions that it would produce an employment bloodbath at fast food restaurants.

Some went further, purporting to find actual evidence of huge job losses. The Wall Street Journal claimed to have discovered losses of 10,000 jobs between September 2023 and January 2024, even before the new wage went into effect. The estimate was duly parroted by the conservative Hoover Institution.

What’s good for workers is good for business, and as California’s fast food industry continues booming every single month our workers are finally getting the pay they deserve.

— Gov. Gavin Newsom on the state’s $20 minimum wage for fast food workers

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Two new analyses of the actual wage and price impacts of the $20-per-hour minimum have appeared this month. They employ slightly different statistics, but their conclusions are the same: There have been no job losses in fast food resulting from the increase. By some measures, employment has increased.

The first analysis to appear came from the Institute for Research on Labor and Employment at UC Berkeley. It found no measurable job losses, significant wage gains (as one might expect from raising the minimum wage to $20 from an average of less than $17), and modest price increases at the cash register averaging about 3.7% — far lower than the fast food franchise lobby claimed were necessary.

The second comes from a joint project of the Harvard Kennedy School and UC San Francisco. Not only did that survey find no job losses, but it also debunked claims or conjectures from minimum-wage critics that the increase would show up as reductions in hours or fringe benefits.

Nothing of the kind has surfaced in the months just before or just after the new law, according to the Harvard-UCSF survey’s authors, Daniel Schneider of Harvard and Kristen Harknett of UCSF.

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“In response to wage increases,” they wrote, “employers could have looked to cut costs by reducing fringe benefits such as health or dental insurance, paid sick time, or retirement benefits. We find no evidence of reductions.”

These results are important for several reasons. One is that the fast-food minimum wage increase is one of the sharpest ever, and the resulting wage the highest in the country (with a few minor exceptions).

It’s also one of the most tightly targeted, applying to California stores of fast food chains with more than 60 nationwide locations. The sector employs about 750,000 workers in the state, 90% of whom were paid less than $20 an hour — on average, slightly less than $17 — before the new wage went into effect.

“This is a big deal because of how many workers are getting raises,” UC’s veteran labor expert Michael Reich, the lead author of the Berkeley study, told me. The estimated average 18% raise for affected workers means that some will be able to afford a better apartment or a used car. Employers get benefits too: “The minimum wage kills a lot of vacancies and improves the supply of labor coming to those restaurants.” That means less worker turnover, which is a bothersome expense.

The fast food raise has been presented as a signature achievement by California’s Democratic governor, Gavin Newsom, who depicts it as emblematic of the state’s progressive labor policies. “What’s good for workers is good for business, and as California’s fast food industry continues booming every single month our workers are finally getting the pay they deserve,” Newsom said in August.

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Fast food employment in California rose after April’s minimum wage increase (solid red line), often faster than in the rest of the country.

(UC Berkeley)

California has been a leader in raising minimum wages. The overall state minimum wage this year is $16 an hour and is scheduled to rise to $16.50 on Jan. 1; that’s the highest state-level minimum and the highest except for the District of Columbia, where it’s $17.50. (Certain localities in some states have higher minimums.) The California minimum wage for certain healthcare workers will rise to between $18 and $23 on Wednesday.

The issue is also timely, for California voters will be asked on election day to vote on a minimum wage increase for employees at all but the smallest businesses to $17 immediately and $18 on Jan. 1.

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All that has made the fast-food minimum a favorite target for employers, their lobbyists and some right-of-center economic commentators.

The minimum wage issue occupies a peculiar place in economic analysis. Many economists and commentators judge it by intuition — if you raise the price of something, such as the price of fast food labor, conventional economics say you’ll get less of it. Hence, higher minimum wage, fewer jobs.

But it’s also among the most heavily studied of all economic phenomena, with the overwhelming majority of studies finding little or no employment effect from a higher minimum. But none examined the effects of a minimum higher than $15.

That left the door open for critics of the California minimum to claim that this higher minimum was destined to wreak havoc on fast food employment. Some jumped the gun by finding job losses even before the law went into effect — ostensibly because employers were cutting jobs in anticipation of higher costs.

As I reported in June, the California Business and Industrial Alliance placed a full-page ad in USA Today, citing the Wall Street Journal’s figure of 10,000 fast-food jobs lost during the fall and early winter and describing 12 restaurants or chains as “victims of Newsom’s minimum wage.”

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This was “baloney, sliced thick,” I wrote. Some of the chains listed were victims of other economic factors, such as competition, or financial manhandling by their private equity owners.

The figure of 10,000 job losses proved to be a statistical error: The Wall Street Journal used non-seasonally adjusted job figures, so it missed the fact that fast-food employment always falls in the September-January period, so the looming minimum wage played no role.

That was something of a curveball for UCLA economics professor Lee Ohanian, who had cited the Journal’s figure in two columns published by the Hoover Institution, where he is a senior fellow, writing that the pace and timing of the employment decline made it “tempting to conclude that many of those lost fast-food jobs resulted from the higher labor costs employers would need to pay” when the new law kicked in.

Ohanian told me in June that he hadn’t realized that the figures weren’t seasonally adjusted, and that he would query the Journal about the issue in anticipation of writing about it again. He told me more recently that he did write to the Journal but didn’t receive a reply, and that he hasn’t revisited the issue thus far.

So what do we know now about the $20 fast food minimum?

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Government labor statistics haven’t shown an employment decrease in the fast-food category leading up to the April 1 date or in most of the months since then. The Berkeley researchers, led by Reich, found that fast-food employment rose almost steady this year from January through August, when it exceeded 750,000 for the first time.

According to the Bureau of Labor Statistics, employment in the sector during that period has run ahead of last year’s monthly figures in every month except June. From April 2023 through August this year, the BLS says, California fast food employment rose by about 3,200 jobs on a seasonally adjusted basis.

Reich’s team questioned reports of sizable price increases by restaurants aiming to pass their labor cost increases onto customers. The Wall Street Journal, for example, quoted one restaurant owner saying he had raised menu prices by 10%, and a McDonald’s franchisee fretting about losing his customer base if he had to raise the price of a Happy Meal to $20. This was nothing but a flight of fancy: The price of a Happy Meal in California ranges from $4 to $8 today, depending on its content and size.

Based on their examination of menus from nearly 1,600 California restaurants, the Berkeley researchers calculated the average price increase to be about 3.7% — “or about 15 cents on a $4 hamburger.” That was less than the 4.8% average increase imposed on fast-food customers from April 2023 to April 2024. Their math suggests that fast food restaurants passed about 62% of their labor cost increase in April to customers; the rest was taken out of profits.

None of this is likely to be the last word on the minimum wage issue. Future increases for fast food workers will be in the hands of an advisory wage council and subject to legislative oversight. It’s still early in the post-$20 era; wage and price effects may take many more months, even a year, to emerge, though over time the hourly minimums for other employment sectors may move higher, making the fast food wage less of an outlier.

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Employment figures, moreover, can be hard to validate. Several different statistical models are in use by states and the federal government. UCLA’s Ohanian reminded me that the quarterly census of employment and wages of the Bureau of Labor Statistics, which covers about 95% of businesses, is current only through the end of March. The next release, covering the second quarter of 2024, won’t be published until December; it’s calibrated with the bureau’s other estimates only once a year.

Don’t expect anything published then to quash the debate over California’s fast food labor policy. The evil of the minimum wage is a favorite chew toy in conservative politics.

But the bottom line is that workers in the California fast-food industry are better off today than they were six months ago. Who has a problem with that?

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Ivan Boesky Was Seen as Greed Incarnate, and Never Said Otherwise

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Ivan Boesky Was Seen as Greed Incarnate, and Never Said Otherwise

Before the answers to life’s questions fit in our pocket, you used to have to turn a dial. If you were lucky, Phil Donahue would be on, ready to guide you toward enlightenment. In a stroke of deluxe good fortune, Dr. Ruth Westheimer might have stopped by to be the enlightenment. He was the search engine. She was a trusted result.

Donahue hailed from Cleveland. The windshield glasses, increasingly snowy thatch of hair, marble eyes, occasional pair of suspenders and obvious geniality said “card catalog,” “manager of the ’79 Reds,” “Stage Manager in a Chevy Motors production of ‘Our Town.’” Dr. Ruth was Donahue’s antonym, a step stool to his straight ladder. She kept her hair in a butterscotch helmet, fancied a uniform of jacket-blouse-skirt and came to our aid, via Germany, with a voice of crinkled tissue paper. Not even eight years separated them, yet so boyish was he and so seasoned was she that he read as her grandson. (She maybe reached his armpit.) Together and apart, they were public servants, American utilities.

Donahue was a journalist. His forum was the talk show, but some new strain in which the main attraction bypassed celebrities. People — every kind of them — lined up to witness other people being human, to experience Donahue’s radical conduit of edification, identification, curiosity, shock, wonder, outrage, surprise and dispute, all visible in the show’s televisual jackpot: cutaways to us, reacting, taking it all in, nodding, gasping. When a celebrity made it to the “Donahue” stage — Bill Clinton, say, La Toya Jackson, the Judds — they were expected to be human, too, to be accountable for their own humanity. From 1967 to 1996, for more than 6,000 episodes, he permitted us to be accountable to ourselves. 

What Donahue knew was that we — women especially — were eager, desperate, to be understood, to learn and learn and learn. We call his job “host” when, really, the way he did it, running that microphone throughout the audience, racing up, down, around, sticking it here then here then over here, was closer to “switchboard operator.” It was “hot dog vendor at Madison Square Garden.” The man got his steps in. He let us do more of the questioning than he did — he would just edit, interpret, clarify. Egalitarianism ruled. Articulation, too. And anybody who needed the mic usually got it.

The show was about both what was on our mind and what had never once crossed it. Atheism. Naziism. Colorism. Childbirth. Prison. Rapists. AIDS. Chippendales, Chernobyl, Cher. Name a fetish, Phil Donahue tried to get to its bottom, sometimes by trying it himself. (Let us never forget the episode when he made his entrance in a long skirt, blouse and pussy bow for one of the show’s many cross-dressing studies.) Now’s the time to add that “Donahue” was a morning talk show. In Philadelphia, he arrived every weekday at 9 a.m., which meant that, in the summers, I could learn about compulsive shopping or shifting gender roles from the same kitchen TV set as my grandmother.

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Sex and sexuality were the show’s prime subjects. There was so much that needed confessing, correction, corroboration, an ear lent. For that, Donahue needed an expert. Many times, the expert was Dr. Ruth, a godsend who didn’t land in this country until she was in her late 20s and didn’t land on television until she was in her 50s. Ruth Westheimer arrived to us from Germany, where she started as Karola Ruth Siegel and strapped in as her life corkscrewed, as it mocked fiction. Her family most likely perished in the Auschwitz death camps after she was whisked to the safety of a Swiss children’s home, where she was expected to clean. The twists include sniper training for one of the military outfits that would become the Israel Defense Forces, maiming by cannonball on her 20th birthday, doing research at a Planned Parenthood in Harlem, single motherhood and three husbands. She earned her doctorate from Columbia University, in education, and spent her postdoc researching human sexuality. And because her timing was perfect, she emerged at the dawn of the 1980s, an affable vector of an era’s craze for gnomic sages (Zelda Rubinstein, Linda Hunt, Yoda), masterpiece branding and the nasty.

Hers was the age of Mapplethorpe and Madonna, of Prince, Skinemax and 2 Live Crew. On her radio and television shows, in a raft of books and a Playgirl column and through her promiscuous approach to talk-show appearances, she aimed to purge sex of shame, to promote sexual literacy. Her feline accent and jolly innuendo pitched, among other stuff, the Honda Prelude, Pepsi, Sling TV and Herbal Essences. (“Hey!” she offers to a young elevator passenger. “This is where we get off.”) The instructions for Dr. Ruth’s Game of Good Sex says it can be played by up to four couples; the board is vulval and includes stops at “Yeast Infection,” “Chauvinism” and “Goose Him.”

On “Donahue,” she is direct, explicit, dispelling, humorous, clear, common-sensical, serious, vivid. A professional therapist. It was Donahue who handled the comedy. On one visit in 1987, a caller needs advice about a husband who cheats because he wants to have sex more often than she does. Dr. Ruth tells Donahue that if the caller wants to keep the marriage, and her husband wants to do it all the time, “then what she should do is to masturbate him. And it’s all right for him to masturbate himself also a few times.” The audience is hear-a-pin-drop rapt or maybe just squirmy. So Donahue reaches into his parochial-school-student war chest and pulls out the joke about the teacher who tells third-grade boys, “Don’t play with yourself, or you’ll go blind.” And Donahue raises his hand like a kid at the back of the classroom and asks, “Can I do it till I need glasses?” Westheimer giggles, maybe noticing the large pair on Donahue’s face. This was that day’s cold open.

They were children of salesmen, these two; his father was in the furniture business, hers sold what people in the garment industry call notions. They inherited a salesman’s facility for people and packaging. When a “Donahue” audience member asks Westheimer whether her own husband believes she practices what she preaches, she says this is why she never brings him anywhere. “He would tell you and Phil: ‘Do not listen to her. It’s all talk,’” which cracks the audience up.

But consider what she talked about — and consider how she said it. My favorite Dr. Ruth word was “pleasure.” From a German mouth, the word conveys what it lacks with an American tongue: sensual unfurling. She vowed to speak about sex to mass audiences using the proper terminology. Damn the euphemisms. People waited as long as a year and a half for tickets to “Donahue” so they could damn them, too. But of everything Westheimer pitched, of all the terms she precisely used, pleasure was her most cogent product, a gift she believed we could give to others, a gift she swore we owed ourselves.

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I miss the talk show that Donahue reinvented. I miss the way Dr. Ruth talked about sex. It’s fitting somehow that this antidogmatic-yet-priestly Irish Catholic man would, on occasion, join forces with a carnal, lucky-to-be-alive Jew to urge the exploration of our bodies while demonstrating respect, civility, reciprocation. They believed in us, that we were all interesting, that we could be trustworthy panelists in the discourse of being alive. Trauma, triviality, tubal ligation: Let’s talk about it! Fear doesn’t seem to have occurred to them. Or if it did, it was never a deterrent. Boldly they went. — And with her encouragement, boldly we came.

Wesley Morris is a critic at large for The New York Times and a staff writer for the magazine.

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Party City to shut down after nearly 40 years in business

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Party City to shut down after nearly 40 years in business

Party City, the party and costume supply chain with more than 70 locations in California including several in Los Angeles, is shutting down operations immediately and laying off its employees.

In an online meeting Friday viewed by Bloomberg News, Party City Chief Executive Barry Litwin told corporate employees that it would be their last day of work. CNN reported that employees would not receive severance pay.

“That is without question the most difficult message that I’ve ever had to deliver,” Litwin said in the video. The company will be “winding down” immediately, he said.

The chain, which has been in business for nearly 40 years and has around 700 locations, according to its website, could not handle a decrease in consumer spending triggered by everyday high prices, Litwin told employees.

Going-out-of-business sales began Friday, just 14 months after the company emerged from bankruptcy and four months after Litwin began as chief executive. The company filed for Chapter 11 bankruptcy in 2023 with about $1.8 billion in debt and emerged from the restructuring process under a plan meant to ensure its viability.

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The company, however, continued to struggle and was considering reentering bankruptcy earlier this month, Bloomberg reported. The New Jersey retailer was falling behind on rent at some locations and running out of cash, according to the report.

Several retailers and fast-casual restaurant chains have struggled this year amid rising operating costs and inflation-wary consumers, including Big Lots, which is preparing to sell its stores, and Red Lobster, which filed for bankruptcy in May. Bricks-and-mortar locations in particular are scrambling to keep up with online retailers and big-box chains.

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How Wally Amos Made His Cookies — and Himself — ‘Famous’

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How Wally Amos Made His Cookies — and Himself — ‘Famous’

Before the answers to life’s questions fit in our pocket, you used to have to turn a dial. If you were lucky, Phil Donahue would be on, ready to guide you toward enlightenment. In a stroke of deluxe good fortune, Dr. Ruth Westheimer might have stopped by to be the enlightenment. He was the search engine. She was a trusted result.

Donahue hailed from Cleveland. The windshield glasses, increasingly snowy thatch of hair, marble eyes, occasional pair of suspenders and obvious geniality said “card catalog,” “manager of the ’79 Reds,” “Stage Manager in a Chevy Motors production of ‘Our Town.’” Dr. Ruth was Donahue’s antonym, a step stool to his straight ladder. She kept her hair in a butterscotch helmet, fancied a uniform of jacket-blouse-skirt and came to our aid, via Germany, with a voice of crinkled tissue paper. Not even eight years separated them, yet so boyish was he and so seasoned was she that he read as her grandson. (She maybe reached his armpit.) Together and apart, they were public servants, American utilities.

Donahue was a journalist. His forum was the talk show, but some new strain in which the main attraction bypassed celebrities. People — every kind of them — lined up to witness other people being human, to experience Donahue’s radical conduit of edification, identification, curiosity, shock, wonder, outrage, surprise and dispute, all visible in the show’s televisual jackpot: cutaways to us, reacting, taking it all in, nodding, gasping. When a celebrity made it to the “Donahue” stage — Bill Clinton, say, La Toya Jackson, the Judds — they were expected to be human, too, to be accountable for their own humanity. From 1967 to 1996, for more than 6,000 episodes, he permitted us to be accountable to ourselves. 

What Donahue knew was that we — women especially — were eager, desperate, to be understood, to learn and learn and learn. We call his job “host” when, really, the way he did it, running that microphone throughout the audience, racing up, down, around, sticking it here then here then over here, was closer to “switchboard operator.” It was “hot dog vendor at Madison Square Garden.” The man got his steps in. He let us do more of the questioning than he did — he would just edit, interpret, clarify. Egalitarianism ruled. Articulation, too. And anybody who needed the mic usually got it.

The show was about both what was on our mind and what had never once crossed it. Atheism. Naziism. Colorism. Childbirth. Prison. Rapists. AIDS. Chippendales, Chernobyl, Cher. Name a fetish, Phil Donahue tried to get to its bottom, sometimes by trying it himself. (Let us never forget the episode when he made his entrance in a long skirt, blouse and pussy bow for one of the show’s many cross-dressing studies.) Now’s the time to add that “Donahue” was a morning talk show. In Philadelphia, he arrived every weekday at 9 a.m., which meant that, in the summers, I could learn about compulsive shopping or shifting gender roles from the same kitchen TV set as my grandmother.

Advertisement

Sex and sexuality were the show’s prime subjects. There was so much that needed confessing, correction, corroboration, an ear lent. For that, Donahue needed an expert. Many times, the expert was Dr. Ruth, a godsend who didn’t land in this country until she was in her late 20s and didn’t land on television until she was in her 50s. Ruth Westheimer arrived to us from Germany, where she started as Karola Ruth Siegel and strapped in as her life corkscrewed, as it mocked fiction. Her family most likely perished in the Auschwitz death camps after she was whisked to the safety of a Swiss children’s home, where she was expected to clean. The twists include sniper training for one of the military outfits that would become the Israel Defense Forces, maiming by cannonball on her 20th birthday, doing research at a Planned Parenthood in Harlem, single motherhood and three husbands. She earned her doctorate from Columbia University, in education, and spent her postdoc researching human sexuality. And because her timing was perfect, she emerged at the dawn of the 1980s, an affable vector of an era’s craze for gnomic sages (Zelda Rubinstein, Linda Hunt, Yoda), masterpiece branding and the nasty.

Hers was the age of Mapplethorpe and Madonna, of Prince, Skinemax and 2 Live Crew. On her radio and television shows, in a raft of books and a Playgirl column and through her promiscuous approach to talk-show appearances, she aimed to purge sex of shame, to promote sexual literacy. Her feline accent and jolly innuendo pitched, among other stuff, the Honda Prelude, Pepsi, Sling TV and Herbal Essences. (“Hey!” she offers to a young elevator passenger. “This is where we get off.”) The instructions for Dr. Ruth’s Game of Good Sex says it can be played by up to four couples; the board is vulval and includes stops at “Yeast Infection,” “Chauvinism” and “Goose Him.”

On “Donahue,” she is direct, explicit, dispelling, humorous, clear, common-sensical, serious, vivid. A professional therapist. It was Donahue who handled the comedy. On one visit in 1987, a caller needs advice about a husband who cheats because he wants to have sex more often than she does. Dr. Ruth tells Donahue that if the caller wants to keep the marriage, and her husband wants to do it all the time, “then what she should do is to masturbate him. And it’s all right for him to masturbate himself also a few times.” The audience is hear-a-pin-drop rapt or maybe just squirmy. So Donahue reaches into his parochial-school-student war chest and pulls out the joke about the teacher who tells third-grade boys, “Don’t play with yourself, or you’ll go blind.” And Donahue raises his hand like a kid at the back of the classroom and asks, “Can I do it till I need glasses?” Westheimer giggles, maybe noticing the large pair on Donahue’s face. This was that day’s cold open.

They were children of salesmen, these two; his father was in the furniture business, hers sold what people in the garment industry call notions. They inherited a salesman’s facility for people and packaging. When a “Donahue” audience member asks Westheimer whether her own husband believes she practices what she preaches, she says this is why she never brings him anywhere. “He would tell you and Phil: ‘Do not listen to her. It’s all talk,’” which cracks the audience up.

But consider what she talked about — and consider how she said it. My favorite Dr. Ruth word was “pleasure.” From a German mouth, the word conveys what it lacks with an American tongue: sensual unfurling. She vowed to speak about sex to mass audiences using the proper terminology. Damn the euphemisms. People waited as long as a year and a half for tickets to “Donahue” so they could damn them, too. But of everything Westheimer pitched, of all the terms she precisely used, pleasure was her most cogent product, a gift she believed we could give to others, a gift she swore we owed ourselves.

Advertisement

I miss the talk show that Donahue reinvented. I miss the way Dr. Ruth talked about sex. It’s fitting somehow that this antidogmatic-yet-priestly Irish Catholic man would, on occasion, join forces with a carnal, lucky-to-be-alive Jew to urge the exploration of our bodies while demonstrating respect, civility, reciprocation. They believed in us, that we were all interesting, that we could be trustworthy panelists in the discourse of being alive. Trauma, triviality, tubal ligation: Let’s talk about it! Fear doesn’t seem to have occurred to them. Or if it did, it was never a deterrent. Boldly they went. — And with her encouragement, boldly we came.

Wesley Morris is a critic at large for The New York Times and a staff writer for the magazine.

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