Last week, Governor Gavin Newsom claimed California is adding jobs while also having some of the highest state minimum wage mandates in the country. However, the overall employment numbers he highlights tell us very little about how the state’s wage mandates are affecting the workers and industries most exposed to them.
California may be adding jobs overall, but private-sector employment includes millions of workers in industries where minimum wage hikes have relatively little direct impact. Food service workers make up the majority (58%) of the workers earning minimum wage, making restaurants one of the industries most directly exposed to wage hikes. When you look at this directly-affected industry, the latest federal data shows employment is in free fall.
According to the latest Bureau of Labor Statistics quarterly data, which most directly reflects employer payrolls, California’s restaurant employment has declined for three consecutive years. Employment fell 0.67% from March 2023 to March 2024, another 1.58% from 2024 to 2025, and an additional 0.11% from 2025 to 2026. Over those three years, California’s restaurant industry shed roughly 27,500 jobs, while the state’s overall minimum wage rose from $15.50 to $16.90 per hour.
In April 2024, the state imposed a $20 minimum wage for fast food workers, raising the wage by 25% overnight. Recent research from UC Santa Cruz found that local restaurants reported responding to higher labor costs by cutting hours and overtime, reducing benefits, and increasing their use of automation. In fact, a July 2025 National Bureau of Economic Research paper found the law cut more than 18,000 fast food jobs.
Full-service restaurants across the state have also faced their fair share of struggles amid increasingly high wage requirements.
- San Diego experienced a spike in restaurant closures earlier this year, with one owner claiming “high opening and operating costs combined with the economic realities of today” as a reason for shutting down his business.
- San Francisco has become “among the toughest places to make restaurants work,” according to one restaurateur, as owners struggle to keep pace with the city’s increasingly expensive business environment.
- Los Angeles saw more than 100 restaurants close their doors in 2025, according to the Los Angeles Times, with many owners citing rising labor costs among the pressures that forced them to close their doors.
Those struggles are unlikely to ease anytime soon. Newsom recently boasted that the state’s minimum wage is set to increase again, from $16.90 to $17.40 in the new year, keeping it among the highest in the country. But a higher minimum wage means less to workers if there are fewer jobs, fewer hours, or fewer opportunities available to earn it. As Newsom continues his high-wage victory lap, the impact these mandates are having on the workers most affected by them deserves a closer look.