Impact of California’s $20 Minimum Wage on Fast Food Employment

California’s implementation of a $20 hourly minimum wage has led to a notable decrease in employment within the fast food sector, resulting in an estimated reduction of 18,000 jobs. This finding comes from a recent paper published by the National Bureau of Economic Research (NBER).

The paper examined the effects of this wage increase on fast food employment from September 2023 to April 2024. Data from the quarterly employment and wage census indicated that California experienced a 2.7% decline in fast food jobs compared to other regions in the United States during that same period. The median estimates suggest around 18,000 jobs were lost in the state’s fast food industry.

According to the Employment Policy Institute, workers in non-tier restaurants faced a potential loss of 250 hours of work annually, equating to a financial hit of up to $4,000. This represents about seven weeks of work per affected employee each year.

In Grove, California, reports detailed that businesses aimed to mitigate increased expenses by laying off many staff members, including up to 1,200 drivers at Pizza Hut. After the minimum wage law took effect on April 1, 2024, various establishments began to automate tasks to sidestep the impact of higher wages, and some fast food outlets even closed their doors.

By June 2024, data from Stanford University revealed over 10,000 fast food positions had vanished. However, the governor’s office disputed these figures, asserting that job growth was occurring until federal data contradicted this claim.

Earlier, Breitbart News reported that a principal fast food franchisee rushed to implement kiosks in response to the new wage law, facilitating job reductions that totalled around 10,000 across California’s fast food venues shortly after the increase. Notably, on New Year’s Day 2025, this wage hike coincided with nearly half of the U.S. and 48 counties.

Research has also pointed to technology stepping in to replace some jobs, highlighting the evolving landscape of the fast food sector.

California Governor Gavin Newsom officially endorsed and signed the minimum wage increase into law, asserting its benefits.

The state currently holds the highest unemployment rate in the nation, with a figure of approximately 5.4%, though this is considered comparatively low.