CA min wage goes up ==> CA employment declines

The classic book, Economics in One Lesson reduces all of economics to a similar lesson:

The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

The lesson of Chapter 3 is similar:

• Consider all costs and benefits that vary with the consequences of a decision:
• If you miss some, that is the "hidden cost fallacy"
• If you take account of irrelevant ones, that is the "sunk-cost fallacy"

 This hidden-cost fallacy comes from California, via Instapundit.com:

California raised the minimum wage statewide for “fast food restaurant employees” to $20 per hour last April following the passage of a ballot proposition in September the year before.

Analysis of unadjusted data from the Quarterly Census of Employment and Wages, the NBER found “that employment in California’s fast food sector declined by 2.7 percent relative to employment in the fast food sector elsewhere in the United States from September 2023 through September 2024 … Our median estimate translates into a loss of 18,000 jobs in California’s fast food sector relative to the counterfactual.”

The fast food sector has also cut workers’ hour and increased automation to avoid paying rising employment costs.

Any econ student could have predicted this using a shift in the supply curve, but someone at UC Berkeley predicted the opposite:

A new study published by UC Berkeley’s Institute for Research and Labor Employment confirmed that California’s $20 minimum wage for fast-food workers has led to significant benefits for workers, without the devastating consequences that critics predicted.  

Fortunately for us, we have an adversarial system, so that mistakes by one side are usually brought to light by the other.  

FOOTNOTE: a middling economists' take on weighing the benefits of our adversarial system. (link)