As the California Legislature nears the end of its 2025 session, debates continue between labor unions and employers over working conditions. Unions advocate for higher wages and benefits, emphasizing worker welfare, while employers argue that increased costs hurt competitiveness and may lead to higher prices, reduced employment, or businesses leaving the state.
This ongoing conflict was highlighted in 2022 with legislation aimed at raising the minimum wage for fast food workers to $22 an hour. The bill also sought to classify franchises as subsidiaries of parent companies and establish a council to regulate working conditions. While the measure passed along party lines and was signed by Governor Gavin Newsom, industry opposition led to a campaign for a ballot referendum. After negotiations, a compromise in 2023 set the minimum wage at $20 an hour without altering the franchise system but kept the oversight council.
The new wage took effect in April 2024. Since then, both sides have released conflicting reports on its impact. On September 5, UC-Berkeley’s Center on Wage and Employment Dynamics published research stating that the $20 wage did not reduce fast food employment or hours worked and only resulted in minor price increases—about eight cents on a $4 burger. The study included data from more than 2,000 restaurants in California and other states.
Five days later, the Employment Policies Institute released its own analysis using federal Bureau of Labor Statistics data. It reported that California’s fast food sector lost over 19,000 jobs since September 2023—almost 16,000 of those after the law took effect—more than double the national rate of job loss in fast food outlets.
These studies present sharply different conclusions about the effects of California’s fast food wage increase. There is no consensus yet on its true impact as both sources are viewed as having interests aligned with either labor or business groups.
Other industries could soon face similar scrutiny; Los Angeles is currently debating a $30 minimum wage for hotel and hospitality workers imposed by its city council.
