California governor promotes higher minimum wage for more jobs in fast food industry

“I don't think (increases) in the minimum wage destroy jobs, I think they destroy openings,” Reich said. “When the minimum wage goes up, more workers are attracted to those jobs and are more likely to stay there. The numbers show that wages can be much higher and businesses can still do well and workers can live well.”

Reich's preliminary research suggests that McDonald's restaurants in California increased hamburger prices by less than two percent after the minimum wage increase.

Most fast-food restaurant owners are franchisees who pay large corporations like Wendy's or Taco Bell to represent their brand. A spokesman for the International Franchise Association, a trade organization that represents fast-food franchisees and franchisors, said the net jobs figures were misleading. The organization, which has fought the wage increase, warned that it would hurt small business owners, workers and consumers.

“Every day there are headlines about restaurant closures, employee layoffs and reduced hours, and rising food prices for consumers,” the spokesperson said in a statement. “Local restaurant owners in California are already struggling to make ends meet on the $20 hourly wage while the Fast Food Council considers additional wage increases. At the same time, workers and consumers are feeling the impact.”

Rebekah Paxton, research director at the Employment Policies Institute, a nonprofit research organization funded in part by the restaurant industry, said seasonally adjusted numbers from the labor bureau reflect a more reliable picture. Fast-food jobs declined by 2,700 nationwide between January and July, according to BLS data, but have increased by about 400 since April.

Paxton pointed to a recent survey her organization conducted of more than 180 fast-food operators in California, which found that most of them had laid off staff and reduced employee hours while raising prices for consumers.

“This is certainly not the rosy picture that the governor is painting,” Paxton said. “Employment in fast-food restaurants is stagnant and even declining. There is a trend that will be exacerbated by the continuation of this minimum wage policy.”

Despite some job losses, the new minimum wage has not had the catastrophic impact on anti-employment workers that had previously been predicted, says John Logan, director of labor and employment studies at San Francisco State University.

“For the most part, this is good news for supporters of the law. There is no evidence of a catastrophic impact on jobs,” Logan said. “In fact, the signs seem to be that California's fast-food sector is continuing to grow.”