California FAST Act Is Bad for Consumers, Workers, and Employers

It's been one year since the implementation of California's Assembly Bill 1228 (AB 1228) that unilaterally increased the minimum wage for quick-service restaurants by 25% overnight.

"California's fast food minimum wage experiment has been a total and complete disaster, precipitating the exodus of businesses leaving California and raising the cost of living on those left in its wake," said Matt Haller, IFA president and CEO. "From day one, we warned that unworkable wage increases would hurt consumers, small business owners, and employees alike, and one year later, that is exactly what the data shows. Higher food prices, increased layoffs, reduced hours, and small businesses struggling to keep their doors open: These are the sad realities of Gavin Newsom's fast food minimum wage experiment. Bad policy leads to bad real-life outcomes, and the tragic lessons of California are worth keeping in mind as the Fast Food Council considers further wage increases and supporters seek to export their failures to the national level."

One year after the minimum wage hike went into effect:

• Jobs lost. New seasonally-adjusted data from the U.S. Bureau of Labor Statistics' Current Employment Statistics (CES) shows California lost 22,717 quick-service restaurant jobs since AB 1228 was signed into law in September 2023.
• Increase in food prices. A recent report by the Berkeley Research Group found food prices at California's quick-service restaurants have increased by 14.5%, which is nearly double the national average of 8.2% since September 2023.
• Hours cut. Nearly 90% of impacted restaurants cut employee hours to offset costs. A survey of affected local restaurant owners revealed that 89% reduced employee hours to offset rising costs with 87% planning additional cuts over the next year.

In April 2024, Haller bylined an op-ed in Fox Business headlined, "California minimum-wage mandate causes maximum damage."