California's $20 Minimum Wage Hike Proves Economists Wrong on Job Losses

A new Berkeley study finds the policy increased wages without reducing employment, contrary to initial predictions.

Apr. 15, 2026 at 11:05am

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A vibrant abstract composition of overlapping triangles and rectangles in shades of blue, red, and yellow, conveying the idea of economic change and growth without literal depictions.A conceptual illustration capturing the economic implications of California's minimum wage hike, which defied predictions of dire consequences.Los Angeles Today

A new study from the University of California, Berkeley found that California's law raising the minimum wage for fast-food workers to $20 per hour in 2024 increased average weekly wages by 11% without reducing employment. The study also found only a modest 1.5% increase in food prices, contrary to concerns from economists and industry groups that the wage hike would be unsustainable and lead to significant job losses.

Why it matters

The findings challenge the conventional economic wisdom that raising the minimum wage leads to significant job losses, especially for low-wage workers. This has major implications for the ongoing debate around minimum wage policies, both in California and nationwide, as states and cities increasingly look to raise wages to address income inequality.

The details

The Berkeley study compiled payroll data, cell phone location data, and food price data to track the impacts of California's $20 minimum wage law for fast-food workers. It found the policy increased average weekly wages for eligible workers by 11%, while prices increased by only about 1.5% - the equivalent of 6 cents on a $4 item. The study's author, Michael Reich, said the results 'are nowhere as dire as predicted' by economists who warned of significant job losses.

  • California implemented the $20 minimum wage law for fast-food workers in 2024.
  • The Berkeley study was released in April 2026, nearly two years after the law's passage.

The players

Michael Reich

The author of the Berkeley study and chair of the Center on Wage and Employment Dynamics at the Berkeley institute.

Christopher Thornberg

The founding partner of research firm Beacon Economics, who warned earlier this year that California's minimum wage hike would have a 'significant negative impact' on vulnerable workers.

Saru Jayaraman

The president of national advocacy group One Fair Wage, which is campaigning for a $30 minimum wage.

In-N-Out

A fast-food chain that was already paying workers a starting salary of $17.50 in 2023, above the state's minimum wage at the time.

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What they’re saying

“The results are nowhere as dire as predicted.”

— Michael Reich, Study author and chair of the Center on Wage and Employment Dynamics at the Berkeley institute

“California's well-intended push to reduce income inequality via wage floors is beginning to have a significant negative impact on some of our most vulnerable workers—our youth, particularly those from lower income households.”

— Christopher Thornberg, Founding partner, Beacon Economics

“Minimum wage is by far the most popular issue out there right now, but the billionaires tax is a close second.”

— Saru Jayaraman, President, One Fair Wage

What’s next

California voters will decide in November whether to impose a one-time wealth tax on residents making more than $1 billion, which 52% of Californians currently support according to a recent survey.

The takeaway

The Berkeley study's findings challenge the long-held economic assumption that raising the minimum wage leads to significant job losses, providing evidence that California's $20 minimum wage for fast-food workers increased pay without major negative impacts. This could serve as a model for other states and cities looking to address income inequality through minimum wage hikes.