California’s $20 Fast Food Wage Hike: Shocking 16,000 Jobs Vanish – What This Means for Workers and the Economy

When California Governor Gavin Newsom approved a $20 minimum wage for fast food workers, many experts warned that it could hurt the industry. Now, the consequences are evident. California has seen the loss of about 16,000 fast food jobs since the law was enacted, and prices at fast food restaurants have surged by over 14.5%.

According to a recent report from the Bureau of Labor Statistics, the increase in wages has led to significant job losses. The data shows that food businesses are struggling with higher costs without seeing much increase in worker productivity. As a result, many owners are forced to make tough decisions that affect both employees and customers.

The Employment Policies Institute highlighted these findings, stating that the job cuts are a direct result of the $20 wage law and that those who are hurt the most are often the least skilled and inexperienced workers. Many fast food operators are now grappling with the need to raise prices or reduce staff just to stay afloat.

A study by the Berkeley Research Group further supports these claims. The study indicated that California fast food establishments suffered significant job losses between June 2023 and June 2024 and that food prices at local restaurants have increased nearly double the national average since the wage hike was approved.

The $20 minimum wage took effect in April 2024, representing a substantial jump from the previous $16 wage. It was part of Assembly Bill 1228, which aimed to improve the livelihoods of fast food workers but has had unintended negative consequences for both workers and employers.

Rebekah Paxton, research director at the Employment Policies Institute, stated that the impacts of this law have been alarming. She pointed out that many workers are feeling the weight of these changes, and she urged the Fast Food Council to reconsider any plans for further wage increases.

Research indicates that almost all fast food restaurants have raised their menu prices due to the wage increase. Additionally, many have cut employee hours, reduced staff, and limited overtime opportunities to manage costs more effectively. Moving forward, it seems likely that these trends will continue, with many establishments planning to raise prices and reduce staff further in the coming years.

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