California Is Paying Its Fast Food Workers More — but Is It Actually Helping Them?

California’s fast food sector made waves this April when a new law went into effect, raising the minimum wage to $20 — effectively making its food service employees the highest paid in the industry. The legislation has sparked controversy since it was signed by Governor Gavin Newsom in September 2023, with critics claiming it might prompt restaurants and franchisees to cut back on the number of jobs. But a recent report from the Governor’s office indicates that the implementation of a higher wage has only witnessed employment growth, culminating in a current 750,500 fast food jobs — the most in California’s history.

The law increased minimum pay from $16 to $20 but only applies to restaurants with 60 or more locations. It also established a Fast Food Council within the Department of Industrial Relations, which will focus on creating fair standards for relevant issues, including working conditions, training, health, and safety. Until January 2029, the Council is charged with managing wage requirements for fast food workers and has the ability to raise them by a maximum of 3.5% each year.

After the new wage was put into practice on April 1st, the industry has shown signs of responding to the greater financial pressure imposed by the new law. Restaurants including In-N-Out, Starbucks, and Chipotle have all confirmed that they’ve raised menu prices in California to help offset the cost of higher pay. 

Michaela Mendelsohn, the owner and CEO of Pollo West Corp, one of the largest franchises of the fast-casual chain El Pollo Loco in California, and an appointee to the Fast Food Council, told Good Morning America that raising her prices led to fewer sales, and she was forced to cut back employee hours, in addition to considering adjusting to shorter operating times for the restaurants.

Reports like these seemed to indicate that critics might be right, and increased minimum wage could translate to a smaller number of fast food jobs. In contrast, recent state and federal data from the Bureau of Labor Statistics (BLS) reveals that there were more fast food employees in California this July than there were last summer, or in the months leading up to the wage increase. You can see a full year-over-year comparison of the number of fast food jobs in California, as reported by Governor Newsom’s office, here:

Newsom’s statement on this data calls out two numbers: that 11,000 jobs have been created since the legislation was enacted in April, and that the 750,500 fast food jobs reported in July of this year are a record high for the state. 

Some critics have pointed out that one mitigating factor for this data is an expected increase in fast food hiring during the summer months. However, data from the BLS suggests that seasonal hiring peaks are more common and significant in states with colder climates, with a minimal impact on California. Only more time will show the long term impacts of a higher fast food minimum wage, but initial statistics demonstrate that the drastic fallout opponents feared hasn’t happened.