Barely A Month Old, California’s $20-Hr. Fast-Food Minimum Wage Is Already An Economic Disaster

California Democrats who pushed through the state’s punitive new minimum wage must be feeling mighty proud about now. Not only are fast-food joints closing or replacing low-end employees with overseas workers and robots, now the law is costing the very people it was supposed to help while decimating consumers’ wallets. Well done!

The $20-an-hour wage floor foisted on California’s fast-food restaurants, dubbed with the innocent-sounding moniker Assembly Bill 257, was signed into law last fall. It didn’t take long to become a disaster.

Hoover Institution senior fellow and economist Lee Ohanian showed just how quickly bad policies can wreck an economy. And the damage was done even before the law officially went into effect a month ago today.

“Between last fall and January,” Ohanian wrote, “California fast-food restaurants cut about 9,500 jobs, representing a 1.3% change from September 2023.” By comparison, overall employment in California during that period fell just 0.2%.

Those who are losing their jobs in this new higher-wage environment are those most easily replaced, with the lowest productivity — which usually means minority youths with minimal education and little or no work skills. In short, the most vulnerable among us.

“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,” Ohanian added.

Because of escalating costs, many restaurants are also adding “ordering kiosks,” basically firing workers and replacing them with user-friendly computer terminals.

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