‘Jobs are Down and Workers are Suffering’ While Gov. Newsom Touts Job Increases

Well, it was only a matter of time. The Globe heard from the Governor’s Deputy Director for Rapid Response, Brandon Richards (He/Him), telling us we need to retract our articles on fast food job losses following Gov. Gavin Newsom signing the mandatory $20 fast food minimum wage into law.

Here is what Brandon (He/Him) wrote:

I wanted to reach out to let you know that the “study” you based prior coverage on was just retracted due to inaccurate data and analysis.

• Original “study” that has since been retracted

RETRACTED: “California Loses Nearly 10,000 Fast-Food Jobs After $20 Minimum Wage Signed Last Fall”
https://www.hoover.org/research/california-loses-nearly-10000-fast-food-jobs-after-20-minimum-wage-signed-last-fall

Hoping you will follow suit and retract your stories.

First, I don’t ever recall seeing a retraction of anything at the Hoover Institution. So this is really unusual. And we will note this on the relevant articles. But there is more to the numbers.

The retraction by the Hoover Institute said this:

“At the time of publication, the author cited data reported by the Wall Street Journal, and interpreted those data as being seasonally adjusted. Following publication, those data were identified as not being seasonally adjusted, the article has been retracted to avoid any misinformation that can be attributed to the article.”

So it’s about seasonally or non seasonally adjusted data? Governor Gavin Newsom frequently touts non seasonally adjusted data. However, the Los Angeles Times’ Michael Hiltzik acknowledged that seasonally adjusted data is preferred by economists.

Just released quarterly data from the Bureau of Labor Statistics found that California has lost 6,166 total fast food jobs since the AB 1228 fast food minimum wage law was signed in September 2023.

While the mentioned Berkeley study was debunked by the Employment Policies Institute (EPI), for using alternative data sources that minimize the extent of the damage AB 1228 has already caused, for apparent bias in downplaying the obvious devastating effects of California’s $20 minimum wage on the state’s fast food industry, they did admit there are over 6,000 job losses because of the increased minimum wage.

Is Brandon saying, “this is a win because we only lost 6,000 jobs?”

Secondly, and all of that aside, the EPI used data independent of the Wall Street Journal and Hoover Institute. And the Globe reported on the EPI studies after the Hoover study.

“Gavin Newsom’s continued denial of the facts is an embarrassment to hardworking Californians. This hypocritical theatre has got to stop. The reality is that jobs are down and workers are suffering because of this law. Don’t take our word for it: The Governor’s own preferred dataset tells the tale. Californians deserve better than a Governor who denies reality,” Rebekah Paxton, research director at the Employment Policies Institute, told the Globe Wednesday.

Here are Key Timeline Dates on the fast food job issues:

• June 6th, CABIA AD runs in USA Today calling out the 10,000 jobs lost, based on Hoover/WSJ estimate
• June 10th, Katy Grimes publishes a story saying “Governor’s Office Gets Snarky With the Globe Over 10,000 Fast Food Jobs Lost.” EPI and CABIA show that jobs or job growth are still down regardless of how you slice the data.
• June 12th, LA Times writes first piece defending Newsom, saying seasonally adjusted numbers are the best and most accurate. “That’s crucial when tracking jobs in seasonal industries, such as restaurants, because their business and consequently employment fluctuate in predictable patterns through the year. For this reason, economists vastly prefer seasonally adjusted figures when plotting out employment trend lines in those industries.” – columnist Mike Hiltzik
• June 26th, But: Newsom then issues press release saying “California keeps adding more fast food jobs” using non seasonally adjusted data (because the seasonally adjusted data no longer supports him)
• July 23rd, EPI releases CA operators survey, which shows 98% of businesses have raised menu prices, 89% have reduced employee hours, and 73% have limited shift pickup and overtime opportunities
• August 20th, Newsom issues another release saying “After raising minimum wage, California has more fast food jobs than ever before” again using non seasonally adjusted data because the seasonal data doesn’t support him
• October 3rd, Newsom issues press release on Berkeley study, calling it a “win-win-win”. Berkeley study has multiple issues but cites upcoming QCEW data as gold standard.
• November 4th, EPI releases policy brief on Berkeley study, systematically debunking the claims
• December 5th, EPI releases analysis on QCEW data — which the Governor’s economists at UC Berkeley calls the gold standard (a “near universe” of data describing employment, p. 5) — showing over 6,000 jobs lost.

The bottom line is that the Governor clearly has an axe to grind. Both data sets show this has hurt workers, and requesting retractions on valid data sources because it doesn’t fit his narrative is disingenuous and wrong.

Perhaps the timing of Brandon’s (He/Him) email demanding a retraction was motivated by Gov. Newsom’s press statement today:

“Private sector jobs are backbone of California’s job growth. Most of California’s jobs are in the private sector. California is home to 1.7 million private sector businesses that account for nearly 87% of California’s jobs.”

While California’s private sector may hold most of the jobs, in a state of 40 million people, that’s no surprise – they should.

California is losing more workers than it’s gaining, new report shows, the Globe reported Nov. 26th. The five US states that lost the most residents in 2023 were California(-690,502), Florida (-514,259), New York(-483,523), Texas (-480,822) and Illinois (-297,765). The states with the largest population have the most inbound and outbound migration – just by sheer numbers. But there is much more chasing Californians to other states.

“Businesses are leaving because it is no longer economically feasible for them to stay within California,” Hoover says. “Businesses that remain in California are hiring much less, and California now has the country’s second highest unemployment rate,” according to the Bureau of Labor Statistics, Nov. 19, 2024.

There is no ignoring Chief Executive Magazine which reports annually on the Best and Worst States for Business. Predictably, in their Best and Worst of 2024, California is ranked number #50 – again… the 11th… or 12th… or 13th year in a row.