Economists warned California not to raise the minimum wage to $20. They were wrong in almost every way so far, another economist says

Following California implementing a law raising its minimum wage to $20 for more than 500,000 fast-food workers in the state in 2024, Christopher Thornberg, founding partner of research firm Beacon Economics, offered a warning about the state raising its minimum wage. 

“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,” he wrote earlier this year.

His concerns echoed those of fast-food franchise owners, one of whom told Fortune in 2024 that higher wages would be unsustainable for smaller chains with slim margins.

But nearly two years after the law’s passage, economists are seeing very different results than what was initially feared. A working paper from University of California at Berkeley released this month found the policy increased average weekly wages for eligible workers by 11% and did not reduce employment. Prices increased modestly, about 1.5%, or the equivalent of about six cents for a $4 item.

“The results are nowhere as dire as predicted,” Michael Reich, the study author and chair of the Center on Wage and Employment Dynamics at the Berkeley institute, told Fortune.

The study compiled payroll data from Glassdoor job postings and Square and collected data on how many workers entered a fast-food establishment on a given date using Advan Research, a firm aggregating cell phone locations. It tracked changes to food price using Doordash. The analysis uses a vastly different set of data to come to the same conclusion as previous research on California’s minimum wage, which likewise found little impact of the law on employment, as well as benefits and........

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