Business

Blue State Sheds More Than 6,000 Jobs Due To Fast Food Wage Law

(Screen Capture/ABC7 News Bay Area)

California has lost over 6,000 fast food restaurant jobs since September 2023 due to the state’s recent law increasing fast food minimum wages, according to an analysis released Thursday by the Employment Policies Institute (EPI).

Since the law’s passage in September 2023, the state’s privately-owned fast food restaurants have lost 6,166 jobs through June, according to the report. Prior research shows some California restaurants began bracing for the minimum wage increase before the law took effect by taking measures such as downsizing staff, reducing scheduled hours or raising menu prices, according to the EPI.

Democratic California Gov. Gavin Newsom signed AB 1228 into law in September 2023. The law increased the minimum wage for fast food restaurant employees so that they must be paid at least $20 per hour beginning in April, and also established a Fast Food Council.

Several California fast food chains announced business changes ahead of the bill being implemented, including laying off delivery drivers and signaling that menu price hikes may occur, according to California-based outlet KTLA. As of July, the state had a total of 750,500 fast food jobs, the most in state history, according to an August press release from Newsom’s office.

Newsom claimed that there have been several positive impacts from the policy, including job growth and improved working conditions, in a September op-ed published by Fox News. Despite Newsom touting his state’s fast food jobs growth in the op-ed, seasonally adjusted federal employment data contradicted his claims and showed that overall employment in the state’s fast food industry is down since the start of the year, according to The Center Square.

“The OpEd in Fox News today by the governor is disappointing because it paints a very misleading picture about what’s going on on the ground,” Rebekah Paxton, director of research and state coalitions at the EPI, told The Center Square in a September interview. “Instead of touting these numbers that most economists would say don’t accurately measure the situation, it would behoove Governor Newsom to talk to the workers and talk to the operators who are losing their jobs and losing their livelihoods as a result of this policy.”

“This is a bogus industry group that’s funded by corporate restaurant chains to protect their profits,” a spokesperson for Newsom said in a statement shared with the Daily Caller News Foundation. “This summer, fast food jobs peaked at numbers never seen before, and now multiple independent research studies are backing up the data. What’s good for workers is good for business.”