Brand-new quarterly data from the Bureau of Labor Statistics (BLS), analyzed by the Employment Policies Institute (EPI), has laid bare a grim reality for California’s fast food industry: the state has shed up to 16,000 jobs since Governor Gavin Newsom signed the $20 fast food minimum wage law, AB 1228, in September 2023.
Nearly 14,000 of those losses hit after the law took effect on April 1, 2024, spotlighting a steep toll on workers and businesses in just six months.
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The BLS data, drawn from mandatory reporting by all fast food establishments, charts a relentless decline. After Newsom inked the bill, employers braced for a 25% labor cost spike—jumping from the statewide $16 minimum—by slashing staff, cutting hours, and hiking menu prices.
The fallout is now quantifiable: a net loss of 16,000 jobs since the signing, with monthly drops accelerating since April.
“The propaganda coming out of Newsom’s office and the SEIU is completely out of touch with reality,” said Rebekah Paxton, EPI’s research director. “The data definitively shows thousands of jobs have been lost due to this harmful policy, and hardworking Californians are left feeling the burden.”
The numbers dovetail with a Berkeley Research Group study showing menu prices soaring 14.5% since the wage hike, nearly double the national average. An EPI survey of fast food operators post-implementation paints an even bleaker picture: 98% raised prices, 89% cut employee hours, 73% curbed overtime or shift pickups, and 70% reduced staff or merged roles.
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Looking to 2025, the pain persists—93% of surveyed restaurants plan further price hikes, 87% expect more hour reductions, 74% anticipate additional layoffs, and 71% will limit overtime.
Critics argue AB 1228, touted as a lifeline for low-wage workers, has backfired spectacularly. Paxton called on the state’s Fast Food Council, which sets annual wage adjustments, to “immediately halt discussions on increasing the fast food minimum wage further,” warning of deeper damage.
The law, affecting chains with over 60 national locations, has already triggered closures—like Rubio’s Coastal Grill shuttering dozens of California spots—and spurred automation, with kiosks and AI drive-thrus replacing entry-level jobs.
Newsom’s office has pushed back, citing earlier claims of job growth in the sector. But the latest BLS figures—unadjusted and seasonally adjusted alike—show a stark reversal, with California’s fast food employment plunging 2.8% from September 2023 to September 2024, against a national dip of just 0.52%. The state’s losses dwarf private-sector trends, marking the worst non-recession year for the industry this century.
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For Californians, the ripple effects sting. Higher prices—think $15 Big Mac meals—hit consumers hard, while job cuts disproportionately axe youth and low-skill workers, drying up entry-level opportunities. As the Fast Food Council mulls a proposed $20.70 wage for 2025, the data screams caution.
“Hardworking Californians are bearing the burden,” Paxton said, “and it’s time policymakers face the facts.” With no comment yet from Newsom’s team on the March data, the debate over AB 1228’s legacy—and California’s economic future—burns hotter than ever.
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