If your hourly wage goes up and you work the same hours, you get more money. But if you work fewer hours, you don’t get the benefit of that wage increase. California hasn’t quite figured that equation out yet.
California has raised its fast food minimum wage to $20 an hour, leaving room for further increases in the coming years. The move has already caused some fast food restaurants and chains to lay off employees who are unemployed and therefore cannot benefit from the law. Some restaurants and chains have also raised prices, and given that the law is already fueling inflation in the state, wage increases for those who are actually employed will likely not be as strong.
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But there’s another impact that’s hurting workers: The state’s major chains are also cutting employee hours to combat rising costs. That means many workers will effectively make the same or close to what they were before, but as inflation spreads through the fast-food industry and trickles down to other industries, prices will rise in California — that is, if it weren’t for the workers who were already laid off to cut costs.
This is how minimum wage hikes backfire, especially when they are as big as California’s. Instead of focusing on lowering the cost of living, California Democrats thought they could cheat the laws of economics and instead made people worse off again.
