Is California’s fast food industry really shedding jobs?

Trade groups and some political pundits have consistently blasted California’s new $20 minimum wage law for fast food workers as a job killer.

Now, California Governor Gavin Newsom’s office is touting numbers indicating the opposite may be true.

According to data from the Bureau of Labor Statistics, California’s fast-food industry has added 10,600 new jobs since Assembly Bill 1228 took effect on April 1 and roughly 20,700 jobs since the start of the year. For comparison, the industry employs around 745,000 people in the Golden State.

Newsom briefly addressed the topic during Tuesday’s State of the State Address.

“All our progress on higher wages and better benefits for working people – it’s not just about the hourly pay rate. It’s about building a dignified and respectful future where everyone is included in our growth,” Newsom said. “We are a state that gives a damn about fast food workers – who are predominantly women – working two and a half jobs to get by.”

California Fast Food Employment

In early June, the California Business and Industrial Alliance placed a full-page ad in USA Today claiming the state’s fast food industry had shed nearly 10,000 jobs since Newsom signed the law in September 2023, before the wage increase was enacted.

The ad featured mock obituaries for chains including Rubio’s, Pizza Hut, and Fosters Freeze, which have either cut jobs or signaled other financial issues in recent months.

“The rapid job cuts, rising prices, and business closures are a direct result of Governor Newsom and this short-sighted legislation,” CABIA said in a news release at the time.

Iconic Hollywood fast food restaurant closes for good

Based on BLS data, California’s fast food industry did, in fact, lose around 9,500 jobs from September through the end of the year -again, before AB 1228 took effect- but that trend has since reversed since January. Or has it?

KTLA contacted CABIA to get a response to Newsom’s statement. It provided yet another data source, this one from the Federal Reserve Bank of St. Louis, showing that California has shed 2,500 fast-food jobs since January on a seasonally adjusted basis. However, total employment was generally flat in April and May.

“Newsom has no shame,” a Business Alliance spokesperson insisted. “[His] bad policy remains indefensible, and workers and businesses are suffering for it.”

Newson’s office says CABIA is reaching and the numbers simply don’t back up their narrative.

More tangible to customers than labor statistics is the actual cost of fast food, which has generally risen since the minimum wage law took effect. According to a report from market research firm Datassential, fast food chains have raised menu prices by roughly 10% since April 1.

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