California’s $20 fast food wage law (Assembly Bill 1228) turns one year old on Tuesday. Proponents, including the Service Employees International Union (SEIU) and Gov. Gavin Newsom, have portrayed the law as an economically painless gift to restaurant workers. But the best available data shows there’s not much to celebrate: The law has cost thousands of restaurant jobs, driven double-digit menu price inflation and even caused some locations to close.
Newsom signed the $20 minimum wage into law in September of 2023, the product of a negotiated settlement between business and labor that kept a referendum on a related law off the ballot. While the business community avoided a costly election-season battle, restaurants were left scrambling on how to adapt to the new wage.
Fast food operators warned of unintended consequences for customers and employees. And those warnings have since proved accurate.
Opinion
Restaurant prices have risen dramatically since the law was signed. California’s fast food prices increased 14.5% in the past 18 months since the law was signed, according to Berkeley Research Group analysis of Datassential’s fast food chain pricing data. This is double the rate of increases in the rest of the country. And the impact is unique to fast food: California’s fast food prices have jumped roughly five percentage points faster than full-service restaurant counterparts in the state…