California has lost thousands of fast food workers since a hefty minimum wage hike went into effect in early 2024, according to a recent analysis from the Employment Policies Institute (EPI), a conservative think tank.
The Golden State is estimated to have lost almost 14,000 fast food jobs since it implemented a minimum wage increase for fast food workers in April 2024, according to an analysis of Bureau of Labor Statistics (BLS) data published Wednesday by the EPI. In September 2023, Democratic California Governor Gavin Newsom signed a law raising the minimum wage for California’s fast food workers from $16 per hour to $20 per hour, which went into effect in April 2024.
“The minimum wage hike took effect just 11 months ago, and though we’re still in the early days the predictable pattern is already emerging pretty clearly: Facing a 25% hike in their labor costs, employers cut labor,” Will Swaim, president of the California Policy Center, told the Daily Caller News Foundation. “They’ve laid off workers and replaced them with ATM-like kiosks to replace counter service, and even automating their kitchens and closing dining rooms or reducing their store hours. At the same time, owners are raising menu prices — and of course that falls most heavily on lower-income people, and that leads to less store traffic — and that kickstarts another round of layoffs.”
Compared to September 2023, there were 16,000 fewer fast food employees in September 2024 — six months after the minimum wage policy went into effect, according to BLS data cited by EPI.
After California’s fast food minimum wages increased, some fast food restaurants in the state reported experiencing less customer traffic as well as having to raise their menu prices, according to Fox News. Still, Newsom’s office has repeatedly lauded the fast food wage increases as having positive impacts on California’s workers and denied claims that the law has reduced the state’s fast food workforce.
Relatedly, the blue state is currently considering further raising its minimum wages for fast food workers.
Additionally, California has also seen a large number of its residents moving to other states in recent years, with many of them citing the high cost of living as the main factor for leaving. Notably, Newsom has been leading an effort to “Trump-proof” California in recent months in an attempt to safeguard his state’s liberal policies from President Donald Trump.
“Union leaders love to say that higher-fast food wages are essential because the cost of living in California is so high,” Swaim told the DCNF. “But the high cost of living is the problem. As a matter of policy, people in the fast food industry would be better served by eliminating the regulations that make everyday living more expensive. Instead of raising wages, the state could make things cheaper – eliminate barriers to new home construction, end regulations that make California gasoline, electricity and water the most expensive in the nation. Generally speaking, California’s high cost of living is self-inflicted, a product of bad policies backed by Democrats and unions.”
When reached for comment, a spokesperson for Newsom’s office referred the DCNF to two studies which stated that overall, the minimum wage hikes did not have negative impacts on fast food employment in California. One of the studies did not find evidence that the minimum wage increases had unintended consequences on staffing, while the other study cautioned against drawing a casual relationship between the policy and substantial negative employment effects and large price increases. Neither study addressed the Wednesday analysis of BLS data from the EPI.
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