California Gov. Gavin Newsom signed Assembly Bill 1228 into law in September 2023, which established a Fast Food Council within California's Department of Industrial Relations and increased the minimum wage for 500,000 fast food workers from $16.00 per hour to $20 per hour on April 1, 2024. Newsom celebrated his signing of the bill as "one step closer to fairer wages…by giving hardworking fast-food workers a stronger voice and seat at the table." Former Assemblymember Chris Holden (D–Pasadena), the bill's primary sponsor, described it as "one of the most impactful fast food wage laws that this country has ever seen."
The law was certainly impactful: A working paper recently published by the National Bureau of Economic Research (NBER) found that the law increased wages in California's fast food sector by 8 percent relative to the rest of the country. But not all of the consequences of the law were intended or positive for workers.
The NBER paper also found that California's fast food employment decreased by 2.64 percent from September 2023 (when Newsom signed the bill into law) to September 2024, while fast food employment elsewhere in the U.S. increased by 0.10 percent over this same period. The paper's economists estimate that the law caused "a loss of 18,000 jobs that would have otherwise existed in the absence of the policy." This finding is particularly striking considering employment trends in California and the rest of the United States.
