In-N-Out Burger employee Alyssa takes customers' orders at the opening of its second location in Redding on Tuesday, Nov. 12, 2019. In-N-Out Burger
Los Angeles, California – A new study from Pepperdine University is reigniting the debate over California’s minimum wage hike for fast-food workers, claiming the policy has led to a steep decline in jobs.
Released on April 1 to mark the one-year anniversary of Assembly Bill 1228, the study says the state’s fast-food sector has shed more than 23,100 jobs—a sharp contrast to the 0.8% growth seen in the industry nationwide. The report, conducted in partnership with Beacon Economics, warns that the $20 minimum wage may be hurting more than helping.
“This new data should be a wake-up call for policymakers,” said Christopher Thornberg, founding partner at Beacon Economics. “The employment losses in California’s fast-food industry are now evident, and they confirm what many had warned about: Drastic wage hikes create real economic consequences, especially for entry-level workers.”
According to the study’s authors, the consequences go beyond job cuts. They suggest the wage increase may also be affecting employee hours, benefits, and the overall sustainability of fast-food businesses. The report urges California’s Fast Food Council to pause any additional regulations—including a proposed wage increase—until “unbiased, comprehensive research is conducted.”
Since AB 1228 took effect last year, increasing hourly pay by 25% at large fast-food chains, the policy has remained a flashpoint between business advocates and state officials. Governor Gavin Newsom’s office has repeatedly downplayed claims of economic damage, citing Bureau of Labor Statistics data showing a 12.9% year-over-year increase in average weekly wages for the sector.
But critics like Tom Manzo, founder of the California Business and Industrial Alliance, say the new Pepperdine findings validate their concerns.
“(The report) is just the latest confirmation that Governor Newsom’s misguided fast-food minimum wage law is killing jobs across California,” Manzo said. “When will enough be enough?”
Still, supporters argue that the wage hike has improved workers’ lives by helping them meet basic needs and encouraging employee retention. Franchise owners also report fewer staffing shortages.
Yet for customers, the reality is higher prices at the counter. Since AB 1228 was signed, many fast-food chains have steadily raised menu prices to offset the added labor costs—a trend that has continued into 2025.
The long-term effects of California’s wage experiment remain uncertain, but this latest study has added new fuel to an already fiery debate.
