Another example of Newsom's policies in California was exemplified in the release from the NBER in their study on Newsom and California's increase of the minimum wage in the fast food industry. They show a decrease in the employment in California while the rest of the country increased in this industry. They tie this directly to the increase of the minimum wage in the industry.
This is their statement about the study:
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. 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. Adjusting for pre-AB 1228 trends increases this differential decline to 3.2 percent, while netting out the equivalent employment changes in non-minimum-wage-intensive industries further increases the decline. Our median estimate translates into a loss of 18,000 jobs in California's fast food sector relative to the counterfactual.
Another article analyzed it this way:
Since April 2024, when the $20/hour law took effect, the state’s fast food industry has shed an estimated 18,000 jobs.
Before the hike, California’s fast food employment had been in line with the rest of the country. But post-implementation, researchers say the state’s employment diverged, dropping as much as 3.9% while national fast food employment slightly increased.
The legislation—AB 1228—was passed in September 2023 and signed by Governor Gavin Newsom. It created a Fast Food Council empowered to raise wages for the sector annually.
The hourly wage jumped from $16 to $20 in April 2024, with more increases possible starting January 2025.
Critics say the job losses were inevitable. “Wage controls never work,” wrote Heritage Foundation economist Rachel Greszler.
She warned that Los Angeles and other cities planning $30/hour wage goals may face similar fallout. The Wall Street Journal echoed that sentiment, calling wage hikes “magical thinking.”
And this:
This outcome was entirely predictable.
When you artificially raise wages well above the market rate for entry-level, low-skill jobs, businesses react.
And they don’t hire more people—they automate, downsize, or shut locations entirely.
Fast food is especially vulnerable. It runs on tight margins and high volume. When the cost of labor spikes overnight, the business model breaks.
Employers don’t have to keep staff—they can install kiosks or use drive-thru AI ordering systems. These technologies already exist, and now they’re cheaper than keeping human workers.
Burger-flipping robots aren’t a science fiction gimmick anymore—they’re a real business solution. And the more expensive human labor becomes, the more attractive the machines get.
Once implemented, automation doesn’t ask for raises or take sick days. That’s just math.
Advocates for these wage hikes often ignore those consequences. They sell the public on the idea of fairness, but leave out the part where jobs vanish.
A higher paycheck is meaningless if there’s no job to earn it.
This is just another example of trying to force failing policies on folks and not considering the unintended consequences.
Established in 1995,
so true
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