A Del Taco fast-food restaurant, areas roped off during COVID-19 pandemic. (Photo: Shitterstock, Steven Bevacqua)
California’s $20 Fast-Food Minimum Wage: Job Losses, Higher Food Prices, Increased Automation
Berkeley Research Group Study: California’s fast-food restaurants lost 10,700 jobs making it the worst performing year outside of a recession
By Katy Grimes, February 19, 2025 11:46 am
A new study released today by the Berkeley Research Group proves that California’s $20 minimum wage for fast food workers has led to job losses, higher food prices, and increased automation in the industry.
The BRG study found, “California’s fast-food restaurants lost 10,700 jobs between June 2023 and June 2024, making it the worst performing year outside of a recession, and the COVID-19 pandemic. Additionally, food prices at local restaurants have increased by 14.5% since the legislation was signed, nearly double the national average.
AB 1228 was signed into law in October 2023 by Governor Gavin Newsom, creating the new $20 minimum wage for fast food employees – a massive 25% increase from the $16 minimum wage.
The increase to $20 minimum wage for fast food workers went into effect in April of 2024. The study confirms that Californians are bearing the cost of the 25% wage hike through significant job losses and steep food price hikes for consumers.
Notably, the study reports that advocates for the fast food minimum wage have already branded the 25% increase a success because fast food workers received higher pay because of the increase, and they falsely claim the number of jobs available to these workers has increased. “However, these claims are not supported by reliable data –and are likely wrong,” the study’s authors say. Here is why:
“US Bureau of Labor Statistics (BLS) employment trends in California’s Limited-Service Restaurants sector have significantly weakened in 2024, making it the worst performing year outside of a recession during this century–compelling evidence that the 25% minimum wage increase has reduced the number of jobs available.
The BLS Limited-Service Restaurants and Other Eating Places data covers a broad category of food service establishments, including restaurants that are not directly impacted by the wage increase.Employment gains in non-affected establishments may mask job losses among fast food restaurants subject to the $20 minimum wage.
Higher wages do not guarantee higher total income for workers if employers reduce hours to offset costs–a reduction most economists would expect to occur as fast food restaurants act to reduce costs in the face of the $20 per hour minimum wage. Survey data confirms that nearly all fast food restaurants have already cut, or plan to cut, employee hours, reducing the overall earnings of workers. If these reductions are large enough, workers could end up with less total income, despite the wage increase. Reliable data on hours worked by fast food employees following the AB 1228 implementation date (April 1, 2024)is not yet available.”
“Economists regularly analyze year-over-year employment trends to account for seasonal fluctuations. If AB 1228 had a favorable impact on employment, as proponents claim, the data should show a larger increase in employment in 2024 than in years without a major minimum wage increase. However, the opposite is true.
Figure 2 shows year-over-year employment trends in the “Limited-Service Restaurants and Other Eating Places” sector during the month of December from 2000 to 2024. While the compounded average annual growth rate over this period is 2.5%, from December 2023 to December 2024, employment in this sector shrank by 0.2%. This marks the only year-over-year decline in December employment this century, aside from the Great Recession (2008-2009) and the COVID-19 pandemic (2020).
These findings directly contradict claims that AB 1228 led to job growth and instead indicate a net decline in employment following the wage increase.”
As the Fast Food Council’s Planning Subcommittee prepares to meet next week, the Globe hopes they acknowledge that another wage increase in 2025 could further harm the restaurant industry, as well as the California economy.
Key Findings from the study:
- 10,700 Jobs Lost: According to U.S. Bureau of Labor Statistics (BLS) Quarterly Census of Employment and Wages data, California’s limited-service restaurant lost 10,700 jobs (-1.9%) between June 2023 and June 2024—marking the steepest decline this century outside of the Great Recession (2009) and the COVID-19 pandemic (2020).
- 14.5% Increase in Food Prices: Since the legislation mandating the $20 minimum wage for fast food workers was signed in September 2023, food prices at California’s local restaurants have increased by 14.5%—nearly double the national average (8.2%).
- Technology and Automation Replacing Workers to Offset Increased Labor Costs: Restaurants have accelerated the use of ordering kiosks, AI drive-thru systems, and robotic kitchen automation, reducing available entry-level jobs and shrinking employment per location.
“This report confirms what CABIA has been saying for months,” Tom Manzo, Founder and President of CABIA, the California Business and Industrial Alliance, told the Globe. “The fast food minimum wage has destroyed jobs and threatened small businesses across California. Now, the question is whether the Governor will finally own up to his egregious mistake, or will he continue trying to gaslight his own constituents to save face.”
The findings echo concerns raised by more than 1,000 local restaurant owners, who recently sent a letter to Governor Gavin Newsom and the Fast Food Council, urging them to reject additional wage increases in 2025.
The concerns raised by those 1,000+ local restaurant owners are a powerful testament to the negative impacts of the minimum wage increase.
Will someone please forward this study to Brandon Richards (He/Him)?
- Sen. Wiener Claims Poll Shows Majority of Californians Continue to Support High-Speed Rail (snort) - February 20, 2025
- California Back With New Reparations Bill for ‘Descendants of Slaves Seeking Licenses’ - February 20, 2025
- California’s $20 Fast-Food Minimum Wage: Job Losses, Higher Food Prices, Increased Automation - February 19, 2025
RELATED ARTICLES
-
February 20, 2024 -
-
Newsom thought that by greenwashing the fast-food industry (mostly populated by new or illegal immigrants) that would guarantee a Democrat win last November….
He miscalculated (again, as he usually does as he’s dumber than an effing box of rocks) and his policies are now blowing up in OUR faces, thanks to the extreme inflation in ALL food prices..
This is congruent with the WEF’s announcement that we should be eating insects to save the planet….
And Newscum is a WEF-stooge/”young global leader”….
And this wasn’t thought of before?……I am not a genius but I saw this coming when it was implemented. The stupidity of this entire thought is frustrating. It made me go from Blue to Red and glad I did!
Yes, this is self-evident, common-sense stuff.
It can be predicted using common sense, or a basic economics course at a sensible school will draw students a picture if needed.
No doubt Brandon Richards (he/him | 🏳️🌈 bi+), who is Newsom’s Deputy Director for Rapid Response, will dismiss the BRG study data like it needs to be seasonally adjusted or some other nonsense? He’ll never admit the Gov. Hair-gel Hitler Newsom’s push for a $20 minimum wage for fast food workers has led to job losses, higher food prices, and increased automation in the industry?
(https://x.com/BrandonRichards)
And there’s another study thay directly conflicts this, funny how that wasn’t mentioned at all. Both are funded by each others sides, so you need an objective study for actual results. What is this trash journalism? Why dont you go post on your Facebook, this is literally a Facebook post.
Do you dispute the Bureau of Labor Statistics? Or that The UC Berkeley labor center and Harvard’s Malcolm Wiener Center for Social Policy lean far left, predictably supporting Newsom’s flawed minimum wage increase.
You also ignore that even though Newsom signed the union-backed bill to raise the fast food minimum wage to $20, there is yet another new effort by unions to boost the minimum wage even higher.
More is never enough?
Three independent studies from Harvard, UC Berkeley, and UCSF show the opposite. And you publish a story about a private study funded by the fast food industry. Pathetic.
Do you dispute the Bureau of Labor Statistics? Or that The UC Berkeley labor center and Harvard’s Malcolm Wiener Center for Social Policy lean far left, predictably supporting Newsom’s flawed minimum wage increase.
You also ignore that even though Newsom signed the union-backed bill to raise the fast food minimum wage to $20, there is yet another new effort by unions to boost the minimum wage even higher.
More is never enough?
Passing $20 fast food minimum wage was about vote-buying and Dem politician capitulation to unions (their donors) and probably other manipulations I’m missing at the moment. But how is this inevitable and indisputable outcome of job loss, restaurant closures, and robots working out for everyone, including Democrat constituencies? The wreckage from it was entirely predictable. Did these Dem politicians NOT know that? I say many of them definitely KNEW what the result would be. Thus I hope Dem voters are taking note that their Dem legislator politicians think they are ignorant and can be played without end. That’s right, they think you can be used so they can “look good” and “caring” in that totally fake and non-productive way they have. Your interests are not being represented by these people.
The good news is that a majority of all voters rejected an expansion of minimum wage in our most recent election. Apparently union hacks and/or the governor’s office are disturbed by a more educated and wised-up electorate and have sent out their flying monkeys to make nasty attack comments (above) in hopes of denying reality. And Katy Grimes is absolutely correct, “more is never enough.” They will never ever be satisfied. Count on it.
Continuing to vote Dem is nothing but destructive, so let’s stop pretending, once and for all, that it’s helpful in any way. Hope even more voters than we’ve seen wake up already are realizing that.
As Rush Limbaugh used to state to make the case of how ridiculous this issue is, “Why not make minimum wage $50/hour? Or $100/hour?” At some point, even dyed in the wool leftist realize what they are proposing.
I say get rid of the minimum wage because tens of thousands of Democrat activists and thieves will be looking for work after being let go by DOGE. These people have NO marketable skills of any kind and the only jobs they might be able to get will need to to start far under $20.
An interesting side note. Panera Bread which got a pass from Noisome on the min wage had their food tested for toxins. The results are truly frightening. Look it up!
Unfortunately something not mentioned in the column nor the discussion is Illegal Aliens began replacing the High School kids back in the 90s. They were cheaper and didn’t need time off for school activities. The California LEFT is only interested in training new activists, we major in protest.