California’s Fast Food Wage Hike: Newsom’s Office Responds to Controversial $20 Increase Report

The California Governor’s Office is challenging a July 2025 study by the National Bureau of Economic Research (NBER). This report claims that the state’s recent $20 minimum wage for fast food workers led to a loss of 18,000 jobs.

Tara Gallegos, deputy director of communications for Governor Newsom, criticized the study, linking it to the Hoover Institution, which she argues has misrepresented data on minimum wage issues in the past.

In response to rising living costs, California passed Assembly Bill 1228 in September 2023, raising the minimum wage for fast food workers from $16 to $20. This law also created the Fast Food Council, which can adjust the minimum wage as needed. Former Assemblymember Chris Holden authored this bill, aiming to balance the needs of both supporters and opponents.

Jonathan Meer, a researcher at NBER, stood by the study’s methods. He suggested that while small wage increases typically don’t affect employment, the California increase was unusually high. Meer hinted that the actual job losses might be greater than reported.

Another study from the Institute for Research on Labor and Employment at UC Berkeley found that the wage hike has had limited negative effects. It reported an increase in wages of about 8% to 9%, no significant job losses, and only a slight increase in fast food prices.

Michael Reich, the author of the Berkeley study, criticized the NBER’s claims, arguing they misrepresented data and utilized poor analytical methods.

While researchers debate the statistics, fast food workers like Julieta Garcia feel the impact of their earnings. Before the wage increase, Garcia chose between paying rent and bills. Now, after the increase, she can manage both and also save for family activities.

In California, nearly 80% of fast food workers are people of color, with about two-thirds being women, according to the California Fast Food Workers Union. The Legislative Analyst’s Office indicates they are the second-largest group of low-wage earners in the state.

California’s Fast Food Council may raise the minimum wage annually by either 3.5% or based on inflation, ensuring that workers can cope with rising living costs.

If you’d like to learn more about wage policies and their implications, you can check studies by the Institute for Research on Labor and Employment and the National Bureau of Economic Research.

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