$20 an Hour Results in Job Cuts

By: M. Scott Morris
Published: August 5th, 2024

A new survey of California fast-food restaurants has found that a $20-an-hour minimum wage has resulted in cut jobs and shuttered locations. The Employment Policies Institute, which conducted the survey, reported that the $20 minimum wage will limit future growth in California.

According to the report, 89% of the 200 restaurant owners surveyed have reduced employee hours. Many respondents have resorted to price hikes and/or laying off staff. Respondents said they expected these consequences to continue into 2025.

Here are key findings from the survey:

• A majority of those surveyed say they have already raised menu prices (98%), reduced employee hours (89%), have limited employee shift pick-up or overtime opportunities (73%), and reduced staff or consolidated positions (70%) as a result of the minimum wage law.
• A majority of restaurant owners say that in the next year they will have to raise menu prices (93%), reduce employee hours (87%), reduce staff or consolidate positions (74%), and limit employee shift pick-up or overtime opportunities (71%).
• 89% of owners say they are less likely to expand inside California (somewhat less likely, 16%; significantly less likely, 73%). A majority (74%) say there is an increase in the likelihood of shutting their restaurants down (somewhat increase, 38%; significantly increase, 36%).
• A majority of respondents (67%) say the minimum wage law will cost their restaurant at least $100,000 per location every year. One in four say it will cost more than $200,000 per location every year.

To read the full report, click here.

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