Preview: California’s Fast Food $20 Wage Has Already Cost Jobs

California’s ill-advised $20 fast food industry minimum wage has been in place for just over a month, and has already triggered negative consequences for small restaurant owners, employees, and customers.

Labor economists largely agree that such a drastic wage increase (from $16 per hour on January 1 up to $20 per hour on April 1) is a bad idea, causing job losses, business closures, and contributing to already-high price inflation. Yet Governor Newsom and state lawmakers ignored the experts and pushed for labor activists’ demands.

Now roughly one month in, Californians are suffering. Rampant local news coverage has documented the fallout for employees experiencing layoffs, local restaurant owners unsure if they can remain in business, and residents worried about the rising cost of food.

Get a taste of what’s happening in California as a result of this poor policy:

While federal data providing the true scope of losses lags behind, a look at fast-food restaurant employment shows California shed 2,912 jobs (or -0.4% of industry employment) from January to March, just before the $20 wage went into effect. Prior to the new law’s implementation on April 1, fast food restaurants signaled their concerns about remaining in business in California, announcing layoffs, price hikes, and closures to brace for impact. This is the first net job loss in the industry during these months since the pandemic.

While adjusted job loss numbers will be released later this month, the early impacts of California’s fast food wage law do not bode well for the state’s employees, restaurants, or customers.