From the beginning of California’s fast food wage hike, EPI and others have been tracking the fallout from the state’s “crappiest law”. While Governor Gavin Newsom has been claiming the law is “good for California,” government data has shown the opposite: the law has caused early job losses, as well as other consequences such as price hikes and the top teen unemployment rate in the country.
Now, even more evidence confirms the $20 minimum wage law has been harmful for employees and restaurants. Most recently, a study from the National Bureau of Economic Research confirms what our EPI research forewarned – AB1228 is doing more harm than good for fast food workers in California. Conducted by economists from UC San Diego and Texas A&M, the study estimates that the state has lost nearly 18,000 fast food jobs since the law went into effect in September 2023.
Beyond the 18,000 jobs lost, the study identified other concerning trends:
Since the law was enacted, fast food employment in California has fallen by 2.64%, while employment in the same sector has grown nationwide.
Compared specifically to states that did not raise their minimum wage during this period, California’s fast food job losses are even more evident, reaching 3.14%.
Employment in California’s non-minimum wage intensive industries (most industries except retail and hospitality) has actually grown by 0.58%, indicating that these declines are not part of a broader economic slump.
Even more telling, prior to the $20 minimum wage, fast food employment in California was growing faster than the national average. The law has not just slowed that growth. It has turned prior growth into losses. The authors describe the overall trend as “a regular and accumulating decline,” suggesting this is not a one time reaction but rather an ongoing consequence of the $20 fast food wage.
These findings align closely with prior EPI research. Using earlier releases of federal Quarterly Census of Employment and Wages (QCEW) data, EPI estimated California had lost over 16,000 fast food jobs in the first year under the $20 wage law.
Additional EPI analysis looked at how this affected individual workers. While some may not have lost their job completely, analysis of Census Bureau data shows the median fast food worker in California lost nearly 7 weeks of work per year following the implementation of the $20 wage hike. That’s equivalent to up to $4,000 in lost potential income for these workers, which is a devastating blow to workers who were promised more through this increase.
Despite these troubling indicators, Governor Newson insisted that California’s fast food wage law was a win for both workers and businesses, claiming that the industry was “booming” and critics of the law were spreading “lies.” With thousands of jobs gone and more to follow as new data continues to emerge, it is time to face reality. This outcome serves as a cautionary example of how poorly designed wage mandates can backfire and highlights the need for policies that support workers without putting their jobs at risk.