The Job-Killing $20 Fast Food Wage in California

In the fall of 2023, California enacted AB 1228 – a $20 minimum wage for the fast food industry, and a new Fast Food Council to deliberate on future wage hikes. Just after the law went into effect in April 2024, EPI conducted a survey of nearly 200 local fast food operators, and found the new $20 wage had already caused 98% of operators to raise their menu prices, and large majorities to reduce employee hours or positions, shut down or move out of state. Following the implementation of the law, EPI used federal Bureau of Labor Statistics quarterly data to determine the job loss impacts of $20 wage, finding it had killed over 16,000 jobs. An additional report used Census Bureau data and found the median California fast food worker lost up to 2 months of scheduled hours compared to the year before the law went into place. These research briefs were also featured in several rebuttals arguing that according to BLS standards, these were the best-available government data to explain the impacts of the wage law, against claims made by supporters of the law, including Governor Gavin Newsom, who said the law was a “win” for Californians.
This research inspired several op-eds placed in the Sacramento Bee, Orange County Register, and National Review, as well as a full-page ad calling it “California’s Crappiest Law” in the California edition of USA Today. Additional coverage of this data was featured in the Wall Street Journal, USA Today editorial board, QSR Magazine, Washington Examiner, Boston Globe, Southern California News Group, Capitol Weekly Sacramento, Center Square California, California Globe, and local radio stations (KFBK, KTLA, KABC).
Ultimately, California’s Fast Food Council members held off on voting on a 3.5% increase to the fast food wage rate, instead moving to discuss the harm caused by the existing $20 wage floor on the state’s fast food businesses and employees, with several members pushing for a public forum and more data to analyze the full impacts of the law before moving forward with any vote.