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.
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.
