State Fast Food Council to Weigh Placing Another Wage Hike on the Agenda at February 26 Meeting as Job Losses and Food Prices Surge
SACRAMENTO – A new study released today by the Berkeley Research Group (BRG) found a series of harsh downstream impacts resulting from California’s increase to $20 minimum wage for fast food workers, which went into effect in April of 2024. The study confirms that Californians are bearing the cost of the 25 percent wage hike through significant job losses and steep food price hikes for consumers.
The findings come as the Fast Food Council’s Planning Subcommittee prepares to meet on Wednesday, February 26 to discuss potentially placing another wage increase for fast food workers on the agenda for the next full Council meeting. Local restaurant owners have warned that another wage hike in 2025 would further devastate the industry, forcing more closures, further layoffs and even higher food prices across the state.
Key Findings:
- 10,700 Jobs Lost: According to U.S. Bureau of Labor Statistics (BLS) Quarterly Census of Employment and Wages data, California’s limited-service restaurant lost 10,700 jobs (-1.9%) between June 2023 and June 2024—marking the steepest decline this century outside of the Great Recession (2009) and the COVID-19 pandemic (2020).
- 14.5% Increase in Food Prices: Since the legislation mandating the $20 minimum wage for fast food workers was signed in September 2023, food prices at California’s local restaurants have increased by 14.5%—nearly double the national average (8.2%).
- Technology and Automation Replacing Workers to Offset Increased Labor Costs: Restaurants have accelerated the use of ordering kiosks, AI drive-thru systems, and robotic kitchen automation, reducing available entry-level jobs and shrinking employment per location.
“This massive wage increase—the largest in the state’s history—has had devastating consequences for small business owners like me,” said Romy Uppal, a Santa Rosa-based Sourdough & Co. franchisee. “I’ve had no choice but to raise prices and reduce operating hours at my restaurants just to keep the lights on. Even then, the financial strain is relentless. I’ve been offered opportunities to expand in California, but the business climate is just too risky for small operators like us. The costs keep piling up, and every new mandate makes it harder to survive—let alone grow. We simply can’t afford another wage hike on top of everything else.”
“So many fast food restaurant owners like me have put everything on the line to follow our dreams of being business owners in our communities,” said Javier Gomez, a Fresno-based Capriotti’s franchisee. “After immigrating from Mexico as a child, I started working in fast food during high school to help support my family. I know firsthand how these jobs provide a pathway to success—but now, thanks to this policy, we’re seeing fewer job opportunities and more businesses struggling to survive. Policymakers need to understand the widespread impacts AB 1228 has had and stop targeting our industry with additional wage hikes and onerous burdens.”
The findings echo concerns raised by more than 1,000 local restaurant owners, who recently sent a letter to Governor Gavin Newsom and the Fast Food Council, urging them to reject additional wage increases in 2025. The letter warns that further hikes would “cripple thousands of small business owners like us who are already struggling to survive.”
“As a second-generation franchisee, my family has spent years building this small business,” said Nareh Shanzarian, a Los Angeles-based L&L Hawaiian BBQ franchisee. “But with costs already skyrocketing, even a 3.5% wage increase could be the breaking point that forces us to shut down. With nearly 60% of California restaurants owned by people of color and 50% owned by women, an additional wage increase that singles out local restaurants would further marginalize the communities we should be uplifting.”
The full report can be found here.