Two UCSC Studies on California Wages and Affordability: Comparing Farmworker and Fast-Food Approaches

Two recent UC Santa Cruz studies examine working wages in California’s high-cost economy. The March 2026 report Dignity in the Fields: Securing Latino and Indigenous Farmworker Well-being and Prosperity in the Salinas Valley (UC Santa Cruz, 2026) focuses on farmworkers in the Salinas Valley. A November 2025 working paper by Stephen Owen titled Let Them Eat Big Macs, Crunch Wraps, and Whoppers: A Working Paper Describing the Statewide Impact of California’s $20 Fast Food Minimum Wage (Owen, 2025) analyzes the effects of the $20 fast-food minimum wage.

Similarities

Both studies highlight real struggles for workers in California’s costly economy. Both draw on worker experiences and discussions about current wages, hours and regulatory compliance and enforcement. Each study notes genuine challenges for employers and employees and look at how businesses and policies shape those outcomes.

Major Differences

The Dignity in the Fields report compares farm workers’ median yearly earnings with cost of living in Monterey County without adjusting for the seasonality of agricultural work. Recent changes to overtime laws and its negative impact on employee wages was not addressed either.  A recent UC Berkley report found that when overtime hours were changed by California law in 2016, employers were forced to reduce hours so workers averaged three to five fewer hours per week with weekly earnings dropping $80–$120.

What are the average earnings by farmworkers? California has the highest minimum wage in the nation and the U.S. Department of Agriculture National Agricultural Statistics Service Farm Labor Survey (May 2025) shows field workers in the state averaged approximately $18.58–$18.70 per hour. Remember, this is an average and many farmworkers in Monterey County can earn above $30 per hour during peak harvest seasons.

The report also does not fully explain how California has the most stringent regulations in the nation governing farm worker protections.  In fact, California’s approach has become a model for other states.

Notably absent is information and/or acknowledgement about the rising costs of farming in the Salinas Valley, which has increased by 44% to 64% over the last several years with regulatory and labor compliance costs increasing substantially. Because farmers are “price-takers” in a competitive global marketplace they cannot pass on higher production costs or they will risk losing customers and contracts. Saying something about ag economics would seem important within this context, however, the authors’ simply state that their report is “not a study of employer economics.”

Among the repeated themes of the UCSC farm worker report is a call for employers to increase wages and regulations.

UCSC’s fast-food working paper takes a different path (Owen, 2025). The paper directly challenges the idea that simply raising wages fixes cost-of-living problems. The researcher looked at data after the $20 minimum wage took effect. Employers responded by cutting hours (about 11.5% by some chains), adding self-order kiosks and increasing automation as well as raising menu prices. The minimum wage increase resulted in workers ending up with higher hourly pay but fewer total hours and less overall income in many cases.  In fact, the report found that many franchises have eliminated overtime, which had previously been an important way for longer-term employees to increase their earnings.

Regarding increased food prices, the author states:  “Since fast food is often considered an ‘inferior good,’ these price increases will disproportionately affect low-income consumers.”

Ironically, the fast food report’s key takeaways were contrasting to the farm worker study, with the fast food report stating that “minimum wage increases may not be the best policy tool for state-level policymakers to achieve their desired goals, and that “substantial reductions in business regulations could avoid these potential pitfalls while also more directly helping those in need.”

Wage Increases and Other Cost Drivers

The biggest cost factor for workers living in Monterey County is housing. Government rules on zoning, environmental reviews, water limits, and building fees have kept supply low for decades. These same problems raise costs for ALL employees. They are not caused by farm employers or restaurant owners.

Monterey County’s housing inventory has been woefully low for decades. Water restrictions, high developer fees, onerous permitting processes, restrictive zoning, and California Environmental Quality Act (CEQA) lawsuits have blocked or delayed new construction. The County of Monterey’s ongoing 6th Cycle Housing Element Update (2023–2031) remains under review by the California Department of Housing and Community Development as of March 2026. It relies heavily on “opportunity sites” and “pipeline projects” rather than readily permitted units.

“Opportunity sites” are parcels the county has identified as places where housing could be built in the future—often empty land or underused properties that would still need rezoning, environmental reviews, water approvals, and full permitting. These are speculative locations, not shovel-ready.

“Pipeline projects” are developments that already have some approvals or are under construction, but even these can stall due to financing, water shortages, or lawsuits. In prior cycles, many jurisdictions fell short on low-income units with production described as “woefully inadequate” in local planning documents.

CEQA lawsuits have added years of delays and uncertainty, as noted in statewide analyses. Recent 2025 reforms (such as AB 130 creating CEQA exemptions for qualifying infill projects) aim to speed up urban development, but constraints like water allocation decisions and zoning limits continue to restrict supply. Reports highlight that decades of these policies have left housing production far below demand, driving up costs for all residents.

Pathways Forward

California’s affordability problems are real for workers. Honest solutions should focus on what actually works. The most powerful step is fixing housing supply by easing zoning limits, speeding up building reviews, reducing fees that block new homes, and addressing water constraints that have stalled development for years. Add job training, seasonal housing help, and programs that build worker skills and savings.

Wages matter, but they cannot fix costs created by broader policies. Farms and restaurants operate in tight markets where extra costs lead to fewer hours or higher prices. Targeted help plus real supply-side fixes offer better results than assuming employers alone can carry the full burden.

References

 

 

 

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