Last September, Gov. Gavin Newsom signed California Assembly Bill 1287 into law, which includes a $20 per hour minimum wage for fast-food workers and a fast-food regulatory council which has the authority to raise the industry’s minimum wage annually. But between last fall and January, California fast-food restaurants cut about 9,500 jobs, representing a 1.3 percent change from September 2023. Total private employment in California declined just 0.2 percent during the same period, which makes it tempting to conclude that many of those lost fast-food jobs resulted from the higher labor costs employers would need to pay.

More fast-food job losses are coming as the new minimum wage took effect earlier this month. This includes losses at Pizza Hut and Round Table Pizza which are in the process of firing nearly 1,300 delivery drivers. El Pollo Loco and Jack in the Box announced that they will speed up the use of robotics, including robots that make salsa and cook fried foods.

Fast food prices are up since the law took effect on April 1. In less than one month, Wendy’s increased prices by 8 percent, Chipotle’s prices have increased by 7.5 percent, and Starbucks prices are up by 7 percent. McDonald's has announced it will be raising prices, and many other fast-food franchises have announced hiring freezes.

California now has the highest-priced fast food in the country, but there is an obvious limit to how much further prices can climb. “I can’t charge $20 for Happy Meals,” noted Scott Rodrick, a Northern California McDonald’s franchisee.

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