Abstract
On April 1, 2024, California implemented a $20 hourly wage floor for workers in large chains in fast-food restaurants and snack and non-alcoholic beverage bars. The new standard, which cor- responds to 69 percent of the state’s median full-time wage, surpasses all prior benchmarks in minimum wage policies and research. Using survey and administrative data on wages and employment, pay data from Glassdoor, prices we scraped from over 2,000 restaurants in California and control states, and DiD and DDD event study methods, we find that the policy increased average weekly wages for covered fast food workers by 10 to 11 percent and did not reduce employment. Compared to controls, prices increased by 2.1 percent two quarters after the policy, equivalent to 8 cents for a $4 item. Employers passed about 63 percent of the higher wage costs to consumers as higher prices, consistent with a monopsony model.
Note: This revised working paper replaces an earlier version published in September 2024, and now includes QCEW data through 2024q4.
