How Has Fast Food’s $20 Minimum Wage Affected Employment? Data Shows Hiring Up

After fears that California’s $20 minimum wage for fast-food workers would decimate the industry, new data shows restaurant hiring increased in the two months since the raise’s implementation.

In April, the minimum wage for fast-food workers at businesses with more than 60 locations leaped to $20 an hour, from the statewide rate of $16. The 25% overnight increase had business owners, politicians, and industry representatives denouncing the move, claiming companies would have to lay off tens of thousands to afford higher payroll costs.

But labor data shows an increase in fast food hiring, and one company says the higher wage is helping retain employees.

“We are a state that gives a damn about fast food workers — who are predominantly women — working two and a half jobs to get by,” said Gov. Gavin Newsom. “Because of the leadership of California’s Legislature, these hard workers finally got the raise and job security they deserved. And the companies themselves got a more stable workforce.”

‘10% Improvement in Turnover’: Raising Cane’s

The U.S. Bureau of Labor Statistics shows employment for limited-service restaurants climbing to 745,600 people in May in California — up from 742,600 the year before and 739,500 in April.

“Limited service” includes restaurants, pizzerias, delis, and many other restaurant types not included in the mandated minimum wage increase.

Since January, that industry sector has added 20,700 jobs.

A representative from chicken restaurant Raising Cane’s Chicken Fingers said the minimum wage bump was a positive.

“We have seen an almost 10% improvement in turnover since increased wages, and our retention rate has also seen a positive impact,” a Raising Cane’s spokeperson said.

Some Restaurants Respond With Bankruptcies, Price Hikes

In response to the increase, In-N-Out increased menu prices.

“I was sitting in VP meetings going toe-to-toe saying, ‘We can’t raise the prices that much, we can’t,’” In-N-Out President Lynsi Snyder said in an April interview on the “Today” show.

San Diego-based Rubio’s Coastal Grill in June declared bankruptcy after closing 48 restaurants, citing the rising cost of doing business in California.