Opinion: California’s $20 fast food minimum wage creates less jobs and lower income

Study data show California fast food workers now face fewer shifts, higher menu prices, and widespread automation after the $20 wage hike.

Washington lawmakers foolishly still think it will work here

Mark Harmsworth
Washington Policy Center

California’s experiment with a $20-per-hour minimum wage for fast food workers is delivering exactly the outcomes we at the Washington Policy Center (WPC) predicted nearly three years ago.

A new University of California, Santa Cruz study now questions the policy’s impact, confirming the unintended consequences WPC warned would follow the April 2024 wage mandate.

Mark Harmsworth, Washington Policy Center

The study finds that while the higher wage has drawn more job applicants to fast-food restaurants, businesses have responded by slashing shifts, reducing available hours, and limiting hiring. One McDonald’s owner reported an 11.5% drop in hours worked, equivalent to losing about 62 full-time positions. Restaurants raised menu prices by 8-12%, accelerated automation with self-order kiosks, and cut overtime, leaving many workers with fewer opportunities and even jeopardizing benefit eligibility. National Bureau of Economic Research papers echo this, showing roughly a 3% employment drop and up to 18,000 jobs lost statewide.

In our October 2023 publication, “California is Raising the Minimum Wage to $25 per Hour for Healthcare Workers and $20 per Hour for Fast Food Workers,” WPC explained that these mandates rest on a false premise: that entry-level jobs are meant to be full-time living-wage careers. Only a tiny share of workers earn the federal minimum wage, yet abrupt hikes punish small businesses operating on razor-thin 3% margins. The result? Job destruction, reduced hours, relocations, and higher prices passed on to consumers, exactly as we saw in Seattle’s minimum-wage experiment and California’s ongoing population exodus driven by soaring costs.

As Sacramento now eyes further wage mandates, including the $25 healthcare increase set for 2026, the evidence is undeniable. Government price controls on labor distort markets, accelerate automation, and harm the very entry-level workers they claim to help.

Washington state should learn from California’s mistake. Real wage growth comes from economic opportunity and skills, not mandates that destroy jobs and inflate prices.

Mark Harmsworth is the director of the Small Business Center at the Washington Policy Center.

Under the Grok Lens

Analysis created with Grok

This independent analysis was created with Grok, an AI model from xAI. It is not written or edited by ClarkCountyToday.com and is provided to help readers evaluate the article’s sourcing and context.

Quick summary

In this opinion column, Washington Policy Center’s Mark Harmsworth argues that California’s $20-per-hour fast food minimum wage has led to reduced hours, job losses, higher prices, and faster automation. He warns that Washington could see similar effects if lawmakers pursue comparable wage mandates.

What Grok notices

Relies on research cited in the column, including a UC Santa Cruz study and National Bureau of Economic Research findings, to support claims about employment declines, price increases, and reduced hours following California’s policy change.
Frames the issue around tradeoffs: higher mandated pay for some workers versus possible losses in shifts, hiring opportunities, and affordability for consumers.
Argues that restaurants often operate on thin margins, making them especially sensitive to sharp labor-cost increases and more likely to respond through price changes, staffing reductions, or automation.
Connects the California example to Washington by referencing prior local wage debates and suggesting lawmakers should study those outcomes before adopting similar policies.
Suggests readers who want to assess the claims more directly should review the underlying studies and compare them with Washington-specific wage and employment data.

Questions worth asking

How might sharp fast-food wage increases affect entry-level job access for teenagers, first-time workers, and people with limited experience?
If businesses automate more tasks in response to wage mandates, how might that change the number and type of restaurant jobs available?
What does evidence from different states and cities show about the net effect of large minimum wage increases on take-home income after reduced hours or higher prices are considered?
How do small restaurants and franchise operators typically adapt when labor costs rise quickly and profit margins are narrow?
What other policy approaches could improve worker earnings or economic mobility without producing the side effects critics associate with large wage mandates?