It's been nearly a year since California raised its fast food minimum wage to $20, so a couple of days ago the IRLE at Cal Berkeley released its second report on how things are going.
First off, multiple sources make it clear that fast food workers are making more money. Duh. They're making $20 an hour.
The more interesting questions are: (a) has this reduced fast food employment? and (b) how much has it raised burger prices? Here's employment:
After you adjust for seasonality there's no difference between California and the broader US. Employment remained steady.
As for prices, the report concludes that California prices went up 1.5%, or about 6 cents for a $4 hamburger. So that's how much more we're paying.
POSTSCRIPT: I should remind everyone that the average fast food wage in California was $18 before the new law was passed. So there was never any big reason to think it was going to make a huge difference.
Back-of-the-envelope calculation: Wages in the fast food industry are typically around 25% of sales. If wages increase by 10%, then if all the costs were passed along, that is a 2.5% increase in prices. A smaller increase suggests that some of those higher wages didn't get passed along.
Many of our older citizens don't seem able to get over a $20 minimum wage, because they keep normalizing back to their youth, when it was a kid's job and pay was just a few bucks an hour. My elderly mother never stopped exclaiming about movie prices, becauset in her day, it cost 25 cents to get in.
If your house is paid for, or someone else is paying, you may have little idea of how much it costs just to live these days. Maybe this is one of the reasons people voted for the con man.
> My elderly mother never stopped exclaiming about movie prices, becauset in her day, it cost 25 cents to get in.
That rings so true. My father (who passed away at age 92) for some reason got in the habit of constantly asking me, "How much does [...] cost?" When I would tell him, or even if I took the real price and cut it in half, his response was always, "Oh my God!"
I saw someone ranting about how everything today is crap, their mom had great pans that she bought in 1960 for $20. $20 in 1960 is of course well over $200 today, the truth is you can get stuff today that is just as good for roughly the same amount, but people want the cheap pans not the Le Creuset.
I tell you what I would love to see, from the Master of all Charts, when you are feeling better, is this.
Question 1: Which County has the best relationship between its minimum wage (or you could pick median wage) and median apartment price. And
Question 2: How does this compare to (pick a US city or State) and
Question 3: Assuming you find a first world country where the ratio is better than the US, what policies does said country have that we don't have? With respect to either minimum wage or housing.
The charts on US home prices v. US income, while detailed, only tell us how this works in a growing huge capitalist country which used to have virtually unlimited land, and based its development accordingly. I'd like to know how Europe works it, and, much like their health care, what we could do to copy it.
Perhaps its all about density, especially Europre v. US. In that case the ship has probably sailed.
PS: This relates to the current post in that of course if you just legislate a higher wage, costs go up to pass that wage along, potentially leaving the wage earner no better or worse off.
Yikes-
All of those requests are good info but still they don't compare to the past.
When my Dad bought his first house he put 35% down which kept his payments low. He worked 2 jobs until he paid it off in 10 years
Now its minimal down payment - length of mortgage is 30 years AND we use our houses like banks - constantly remortgaging to buy cars, or other things
It looks as though priorities changed
We went from priority being having OUR roof over our heads to getting any roof over our heads and using that "roof" to afford bright shiny new things in the future. Now we have to keep home builders, plumbing supply houses, lumber suppliers and flooring guys (and many others) all employed because our economy depends on them.
I don't get it. I have never seen an economy so driven by keeping people in debt, or by keeping people spending. We have gotten to the point that for many people the ONLY way to get them to save is to (almost) force them into 401k programs at work. Its very strange
So there was never any big reason to think it was going to make a huge difference.
The study says it estimates the average wage increase was around 9 percent for these workers so, on an individual level, that is quite a big difference in these workers' lives.
Where can you still get a burger in CA for $4?