Newsom Backed $20 Minimum Wage Hike Linked to 18,000 Lost Jobs [WATCH]

California’s $20-per-hour minimum wage for fast food workers, which went into effect on April 1, 2024, has been linked to a substantial reduction in employment within the industry, according to a new report released by the National Bureau of Economic Research (NBER).

The wage hike, enacted in September 2023 as part of Assembly Bill 1228, was intended to improve pay for fast food workers across the state.

However, the NBER report concludes that the policy has led to a decline of 18,000 jobs in the sector compared to what would have occurred without the increase.

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“We analyze the effect of California’s $20 fast food minimum wage, which was enacted in September 2023 and went into effect in April 2024, on employment in the fast food sector,” the NBER researchers wrote.

“In unadjusted data from the Quarterly Census of Employment and Wages, we find that employment in California’s fast food sector declined by 2.7 percent relative to employment in the fast food sector elsewhere in the United States from September 2023 through September 2024.”

The paper noted that when adjustments are made for pre-AB 1228 trends, the employment decline grows to 3.2 percent.

The study further isolated the change by excluding employment trends in industries not typically reliant on minimum-wage labor.

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The report’s median estimate concludes that 18,000 fast food jobs were lost relative to the counterfactual.

Additional estimates provided by the Employment Policies Institute suggest that non-tipped restaurant employees lost an average of 250 work hours annually due to the wage hike, which translates to roughly $4,000 in lost income.

The institute noted that this amounts to about seven weeks of work per year per employee.

According to the California Globe, employers began cutting positions ahead of the law’s implementation in anticipation of higher labor costs.

Notably, Pizza Hut laid off approximately 1,200 delivery drivers. Once the law took effect, restaurants reportedly moved to automate wherever possible and some closed entirely.

By June 2024, data from Stanford University indicated that more than 10,000 fast food jobs had already been lost.

While Governor Gavin Newsom’s office initially challenged the numbers, stating that fast food employment had increased, that position shifted later in the year as federal employment data did not support the administration’s claims.

In an earlier report from Breitbart News, a large fast food franchisee in California said in April 2025 that he was rapidly installing ordering kiosks at his restaurant locations in order to offset rising labor costs.

The outlet also reported that roughly 10,000 jobs had been eliminated across the state’s fast food sector in the months following the wage increase.

The adoption of automation in fast food operations appears to be one factor contributing to the reduction in job availability.

A separate update from KMPH also indicated that more restaurants are implementing technology solutions to reduce labor expenses.

California currently holds the highest unemployment rate in the United States at 5.4%, although that rate remains historically low by national standards.

The national economy is increasingly strong. Imagine what it would be without Newsom dragging us down.

America: 4.1% unemployment, +1 million jobs, $3.15 gas, wages up, inflation down

CA: 5.4% unemployment, negative job growth, $4.50 gas, wages stagnant pic.twitter.com/Li4BuwA9hy

— Kevin Kiley (@KevinKileyCA) July 18, 2025

Governor Gavin Newsom, who signed the wage law in 2023, has publicly defended the policy despite the employment data.

The long-term effects of the wage increase remain to be seen, but researchers continue to monitor its impact on employment, automation trends, and business closures in the fast food industry across the state.