Once Again, the Economists are Wrong

Whenever someone proposes raising the minimum wage, economists always scream that this will destroy jobs, and every time, they are wrong.

This time, it's California.

Last year, California Gov. Gavin Newsom signed the state’s fast-food minimum wage increase into law, which meant that employees at fast-food restaurants in the state went from making $15.50 per hour to $20 per hour. While the decision was lauded by many labor activists as part of broader efforts to improve working conditions and address wage disparities, some economists and fast-food industry members expressed concern over how the law would impact restaurants’ operating costs, which could result in reduced hours for workers or even job cuts.

However, according to new state and federal employment data, California’s fast-food industry has added jobs every month this year — including 11,000 new jobs since the wage increase officially went into effect in April.

I wonder if perhaps those elegant models which assume completely rational actors and perfect information might not reflect the real world.