New open-access paper out in *Applied Economics Letters*
https://doi.org/10.1080/13504851.2026.2641130
California's AB-1228 raised the minimum wage for fast-food chains to $20/hr in April 2024 — a 25% jump from the $16 statewide floor. The law was announced in September 2023, giving firms 6 months to prepare.
Turns out, they used every one of those months.
Using GPS mobility data as a real-time staffing proxy, Pandit finds:
~8% drop in on-site staffing at covered fast-food outlets
Decline started right after the *announcement*, not the implementation
Zero effect at exempt venues – strong evidence this is causal
Same pattern in cities and rural areas
The short-run elasticity of -0.3 to -0.4 is consistent with the broader minimum wage literature.
The big unanswered question: is this fewer workers, shorter shifts, or both? The data can't fully distinguish – but either way, the adjustment was real and it happened fast.
Full paper is free to read. Curious what this sub thinks.
Did California's $20 fast-food minimum wage actually reduce employment?
byu/Odd_Leadership_2317 inAskEconomics
Posted by Odd_Leadership_2317
1 Comment
I mean, yeah, it’s plausible. Certainly fits in with the lit and other city level studies (Seattle) that have found negative intensive and extensive margin employment effects. And it was a big increase. That was sector specific.
That said. It’s AEL. I’d like to see this in a better journal, and surprised it was targeted at an outlet like this. Minimum wage analyses typically are much more in depth.