New Federal Report: California Has Lost Well Over 6,000 Fast Food Jobs Since Sept. 2023

New quarterly data from the Bureau of Labor Statistics (BLS) released on Thursday found that California has lost 6,166 total fast food jobs since the AB 1228 fast food minimum wage law went into effect in April, confirming once again what the Governor’s office has continuously denied is happening.

Ever since the fast food minimum wage was bumped up to $20 an hour from the statewide $16 minimum wage in April, the fast food industry has struggled. Some, like Chipotle and McDonalds, raised prices. Others invested in automated kiosks and other automated devices to help reduce the number of employees. Some stores outright closed, such as most Rubio’s Coastal Grill locations in California.

Most notable, however, has been the massive amount of layoffs. While many stores let only a few go, others had more drastic numbers. Pizza Hut alone laid off 1,200 delivery drivers due to the higher costs.  Others, including Roundtable Pizza, did the same, pushing delivery duties onto services like DoorDash and Uber Eats.

Lawmakers even scrambled to mitigate the damage. AB 1228’s author, Assemblyman Chris Holden (D-Pasadena), created a new bill to grant numerous exemptions in an attempt to lighten the economic blow of AB 1228, including to fast food restaurants in airports, stadiums, casinos, events and corporate campuses. However, as the Globe noted, AB 610 does anything but cleanup the mess caused by AB 1228. While it was passed, closures still continued, but on the more quiet side.

But things grew worse. In June, a Hoover Institute at Stanford University study cited by the California Business and Industrial Alliance found that thousands of fast food jobs had been lost as a result of AB 1228, something which the Newsom administration continued to vehemently deny for months. By July, a new survey found that 74% of California fast-food restaurant owners said that “there is an increase in the likelihood of shutting their restaurants down”. Amidst all of this, labor unions were actually calling for a raise to $20.70 per hour for fast food employees.

More jobs lost

However, the Newsom Administration ran out of any leeway by September when the BLS released a jobs report finding that California had lost 5,416 fast food jobs since January 2024. While Newsom and others in his administration tried to spin the numbers before the statistics were released (as California had some minimum wage laws going on the ballot), they failed. This was only heightened last month when it was found out that UC Berkeley had been severely downplaying the negative effects of the AB 1228 law, as the Globe reported.

The news about the negative effects on the fast food industry did have effects though, something which supporters of increased minimum wages did not want. Voters last month rejected Prop 32, which would have raised the state minimum wage to $18 an hour. Other studies found that cashiers at fast food restaurants have been drastically reduced, with most orders going through apps or through kiosks at stores with only cash customers, or stores without kiosks having a dedicated cashier.

This led to Thursday when the new quarterly BLS report came out, finding out that, once again, more fast food jobs have been lost. According to the report, 6,166 fast food jobs have been lost in California since September 2023 when Newsom first signed AB 1228 into law. Shockingly, in the previous year, California gained 17,528 fast food jobs. California was also the outlier – the rest of the country has had an overall 1.6% growth in fast food jobs.

Unlike previous fast food job loss announcements, Governor Newsom and other lawmakers didn’t bother to try and spin the new figures, as they now show a clear pattern with non-partisan federal data. The new BLS figures also brought on a renewed flurry of criticism against the AB 1228 law.

“Newsom took a sledgehammer to the state’s restaurants when he signed the $20 fast food minimum wage law,” said Rebekah Paxton, research director at the Employment Policies Institute. “Jobs have been smashed by thousands and the industry is struggling to stay afloat. Californians saw the devastation first hand and voted to stop the bleeding, delivering the state’s first minimum wage ballot measure rejection. It’s time California’s elected and appointed representatives wake up and stop any additional wage hikes before they can cause even more damage.”

Bernard Warren, an analyst who tracks minimum wage changes, added, “The only reason that the numbers aren’t even worse is because of store openings. Either they were approved or being built when the law kicked or or some entrepreneurs really wanted to get a new franchise location. And then these stuck around because they focused more on automation. So without these hiring crews, we are probably talking thousands more lost.

“It’s also really telling that Newsom and co. aren’t even denying these reports anymore. Everyone knows that AB 1228 was a terrible failure. They could have done the smart thing and put it to voters or instituted a rolling minimum wage increase. But no. It was $4 more per employee per hour at places with already razor thin margins. You can see just how well that all has been working out now.”

As of Thursday afternoon, Newsom’s office has not remarked on the new BLS figures.