CALIFORNIA – A new report published this month by the National Bureau of Economic Research (NBER) found that employment in California’s fast food sector had a loss of 18,000 jobs after the minimum wage was raised to $20 per hour.

The researchers from UC San Diego and Texas A&M University called it one of the largest one-time, industry-specific minimum wage hikes in U.S. history and analyzed the impact.

“With respect to employment, we first show that California’s fast food employment was on a similar path as the rest of the United States prior to AB 1228’s enactment,” wrote the researchers.

AB 1228 raised fast food wages in California by 25%, aiming to improve labor standards in the industry. 

Compared to other states, this represented an 8% relative increase.

“Following AB 1228’s enactment, employment in the fast food sector in California fell substantially, with estimates ranging from 2.3 to 3.9 percent across specifications, even as employment in other sectors of the California economy tracked national trends,” wrote the economists.

Researchers recommend studying long-term effects of AB 1228

The researchers estimate AB 1228 led to about 18,000 fewer fast food jobs in California, mainly in limited-service restaurants.

They recommend studying the policy’s long-term effects, including impacts on prices, hours of work, compliance, business closures and how it influences related industries like full-service restaurants.