Newsom’s Office Challenges Report on $20 Fast Food Wage Increase

August 11, 2025

California's Governor's Office is contesting findings from a July 2025 National Bureau of Economic Research (NBER) study claiming that the state's minimum wage increase to $20 for fast food workers resulted in 18,000 job losses. The wage increase, established through Assembly Bill 1228 in September 2023, went into effect on April 1, 2024, and created the Fast Food Council to regulate industry wages. A contradictory UC Berkeley study found no negative employment effects from the wage increase, instead showing 8-9% wage increases for covered workers and minimal price increases of about 1.

Who is affected

Fast food workers across California, nearly 80% of whom are people of color and about two-thirds women
Fast food employees like Julieta Garcia, a Pizza Hut employee in Los Angeles
Fast food businesses and establishments in California
The second largest group of low wage earners in California (behind home care aides)

What action is being taken

California's Governor's Office is pushing back against the NBER study findings
The Fast Food Council is regulating and has authority to adjust the industry's minimum wage
Researchers from different institutions are conducting and publishing competing studies on the wage increase impacts
Fast food workers are receiving the increased minimum wage of $20, up from the previous $16

Why it matters

The debate centers on whether raising minimum wages causes job losses or benefits workers
The policy directly affects the financial wellbeing of a large segment of low-wage workers, particularly people of color and women
Workers like Julieta Garcia report being able to pay both rent and bills simultaneously with money left over for family activities
The competing studies present dramatically different conclusions about the economic impacts of the wage increase
The policy represents a significant intervention in labor markets that could influence similar policies elsewhere

What's next

California's Fast Food Council has the authority to increase the minimum wage further, either by 3.5% or the annual inflation rate each year

Read full article from source: The San Diego Voice & Viewpoint