News Summary

California’s implementation of a $20 minimum wage for fast food workers under the FAST Act has led to mixed outcomes. While salaries have increased for many, the sector has seen a significant job decline, with over 22,600 positions lost. Some workers face reduced hours despite higher wages, raising concerns among economists and business owners about the balance between fair pay and employment stability.

California’s implementation of a $20 minimum wage for fast food workers, established under the Fast Food Accountability and Standards Recovery (FAST) Act in April 2024, has resulted in mixed outcomes a year later. While the legislation aimed to uplift the financial standing of employees in this sector, evidence shows a decline in jobs alongside some positive effects on wages and worker stability.

Approximately half a million fast food workers in California benefited from the wage increase, surpassing the state’s overall minimum wage of $16.50. A newly established statewide council oversees wage and safety standards for large fast food establishments, defined as those with over 60 locations nationwide. Despite the wage increase, employment at California’s limited-service restaurants saw a decline of 3.1%, correlating to over 22,600 job losses from March 2024 to March 2025. This reduction is significantly more pronounced than the national trend, which indicated a slight increase of 0.8% in fast food jobs during the same period.

Restaurant owners have reported responding to increased labor costs by trimming employee hours and implementing hiring freezes. Some workers allege they have been receiving fewer hours despite the wage increase, which has resulted in similar financial difficulties as before the policy was put in place. This contradiction has led to a division among economists regarding the net effects of the wage hike. Certain experts have noted considerable job losses in the sector after the enactment of the FAST Act, which stands in contrast to earlier analyses that claimed job losses would be negligible.

Data from March 2025 highlighted that California’s fast food industry experienced a loss of over 23,100 jobs, reinforcing concerns regarding the impact of the wage policy. Nevertheless, other studies propose that the wage hike has not led to significant reductions in job availability or working hours for most employees. Research from UC Berkeley indicates that, on average, wages for fast food workers increased between 8% and 9% without the prospect of substantial job loss.

Individual accounts from workers show that while some have experienced improved financial stability due to the increase in hourly pay, they often face alterations in their work schedules that reduce their overall weekly hours. For example, Selvin Martinez from San Jose reported finding relief in being able to manage bills and support his family. However, with fewer hours, he, like many others, concurrently struggles to maintain the same level of financial well-being.

Concerns amongst restaurant owners extend beyond labor implications. Many have signaled a downturn in sales, with several locations reporting diminished revenue over the past year. Franchise owner Kerri Harper-Howie described how her family business has had to utilize savings to cope with rising wage costs and diminishing sales, leading to significant cuts in labor hours without resorting to layoffs.

Following the implementation of the wage policy, fast food prices in California rose by 1.9%, compared to a broader national price trend. As the landscape continues to evolve, the next Fast Food Council meeting is scheduled for January 23, 2025, where a potential wage increase to $20.70 will be discussed. Opposition to further wage increases is mounting, with critics arguing small businesses might not withstand additional financial pressures.

Proponents and representatives from the fast food industry maintain ongoing disagreements regarding the economic repercussions of the wage increase and the subsequent job losses. As the situation develops, the full impact of the FAST Act remains under scrutiny amid a backdrop of differing perspectives on the balance between fair wages and employment stability.