A recent analysis by the Institute for Research on Labor and Employment at the University of California, Berkeley, suggests that California’s legislation to increase fast food workers’ minimum wage has not resulted in significant job losses or increases in menu prices.

The law, known as AB 1228, was implemented on April 1, establishing a $20 per hour minimum wage for fast food employees at chains with fewer than 60 locations nationwide, as well as those situated in airports, stadiums, and convention centers. It also provided stronger protections for workers and enhanced their collective bargaining rights.

“Our findings indicate that this wage standard boosted the average pay of non-managerial fast food employees by almost 18 percent, which is a significant increase compared to past minimum wage legislation,” the report published on September 30 stated. “Importantly, this policy did not negatively impact employment levels.”

At the time the law was implemented, California had roughly 750,000 fast food positions, according to the research.

The California Business and Industrial Alliance took out a full-page advertisement in the October 2 edition of YSL News, citing Federal Reserve Bank of St. Louis data that claimed 5,416 fast food jobs were lost between January and August.

Wage Hikes Result in Minimal Price Increases

The study indicated that following the implementation of the minimum wage increase, prices saw a temporary rise of 3.7%, translating to about 15 cents more for a $4 item. According to the report, consumers absorbed approximately 62% of the additional costs incurred by the new law.

In a survey by YSL News conducted in May, after the law took effect, the most expensive burger combo meal was found mainly outside California across major fast food chains.

The analysis also suggested that the wage increase could have beneficial ripple effects for restaurant owners and franchise operators.

“Research similar to ours noted that $15 minimum wage laws in California and New York effectively raised fast food wages without harming employment in the sector, while also leading to lower hiring and employee turnover expenses,” the study concluded.