In Just One Week, California’s $20 Minimum Wage Is Already a Disaster

State legislators and Governor Gavin Newsom have pushed California’s fast food industry into free fall, and it’s only been one week since the new $20 minimum wage mandate went into effect.

Since April 1, headlines have flurried out of California documenting the bloodbath local franchisees are experiencing. The $20 minimum wage, which generally applies to fast food restaurants with more than 60 locations nationwide (with some exemptions), has already forced restaurants to switch to automation, lay off employees, or even close down for good.

Just this week, restaurants and their employees are experiencing serious negative consequences of the new law:

Customers are already feeling the pressure too: many California residents have indicated the new wage hike and subsequent price hikes may force them to reduce eating out at these restaurants.

Economists have warned against these consequences for decades, as Dr. David Neumark wrote in the Wall Street Journal this week. The overwhelming majority of economic research over the last thirty years indicates that minimum wage hikes cost jobs, especially for younger and entry-level employees. In a recent survey of over 150 American labor economists, three-fourths agreed wage hikes up to $18 an hour or higher as proposed in California would hurt employment.

Not only are these effects (which economists have warned about for decades) already materializing in California, state lawmakers can’t even communicate the mandate properly to its business owners. One ice cream shop owner reached out to the California labor department, who then directed her to seek guidance from the Service Employees International Union (SEIU) and Unite Here local unions that pushed the bill through the legislature last fall.

While it’s still early to grasp the full consequences of California’s misguided, disastrous $20 wage mandate, in just a few days, restaurants and their employees are already feeling the extreme heat.