A $20 Minimum Wage Sounded Like a Win—Until These 5 Consequences Kicked In

California’s $20 minimum wage sounded like a win—until these five ripple effects hit workers, prices, and jobs. Here’s what leaders need to know to design business models that actually work. 

EXPERT OPINION BY SOREN KAPLAN, WSJ BESTSELLING AUTHOR, KEYNOTE SPEAKER, AND LEADERSHIP STRATEGY ADVISOR

A recent University of California, Santa Cruz study quantified a pattern every leader should recognize before issuing a mandate: when you impose rapid cost change on a complex system, you get unintended consequences. 

Economics lecturer Stephen Owen and a team of undergraduate researchers studied more than 100 fast food restaurants across Santa Cruz and California’s Central Valley, reviewing financials and interviewing owners and managers after California raised the fast food minimum wage from $16 to $20 in April 2024. The wage increase was designed to solve the systemic problem that service workers earn poverty-level pay in one of the nation’s most expensive states. 

Owen........

© Inc.com