Trump Weighs In as $20 Fast-Food Wage in California Defies Predictions
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Despite warnings of economic fallout, California’s $20 minimum wage for fast-food workers – implemented in April 2024 – has not triggered the widespread closures adn job losses predicted by critics, according to emerging data. Former President Donald Trump recently criticized california Governor Gavin Newsom, stating he is “laying siege on the minimum wage” during remarks at the McDonald’s Impact Summit in Washington, D.C. on November 17, 2025. Though, initial analysis suggests the policy’s impact has been more nuanced than anticipated.
A Higher Wage Floor Takes Hold
The landmark legislation, applying to fast-food chains with over 60 national locations, raised wages by 25% compared to California’s general $16 minimum wage. This sectoral pay floor is part of a broader law establishing a council to recommend industry standards and potentially raise the minimum wage annually.The change stemmed from a compromise between the restaurant industry and labor unions, with the Service Employees International Union championing the legislation to improve worker livelihoods and reduce industry turnover.
While swift-service restaurants initially argued they were unfairly targeted and the wage hike woudl burden their businesses, the feared economic collapse hasn’t materialized. “I firmly believe that everyone should be entitled to a fair wage,” stated a McDonald’s franchise owner operating 25 locations in Los Angeles County. “The issue that I and my colleagues in this industry have is that we, as an industry, were targeted. If someone works at Macy’s and they’re making minimum wage, or they work at CVS… They also should deserve that increase in wages.”
Limited Spillover, Continued Growth
Notably, California voters rejected a ballot measure last November that would have raised the statewide minimum wage to $18 an hour – the first time in nearly three decades a statewide minimum wage hike was defeated. For now, other states are observing the California experiment before considering similar measures
Impact on Businesses and Workers
One multi-unit franchisee, speaking on condition of anonymity, described the impact of former President Trump’s hardline immigration stance on their workforce, stating, “our employees are predominantly Latino, and they’re terrified.That’s all of our hourly workers, our general managers, our shift managers, our department managers, and supervisors – and it’s our customers.”
While some operators haven’t been forced to close locations, others have. One franchisee has shuttered roughly 10 California locations in the past year and a half, anticipating another 12 closures in the next one to two years. In contrast, their Taco Bell locations in Oregon remain profitable, demonstrating the stark difference in operating environments. Some franchisors are even opting to refranchise their California restaurants, prioritizing franchise fees over direct operation.
A Lifeline for Workers, Despite Challenges
Despite the challenges, the wage increase has provided a lifeline for many workers.One former Jack in the Box employee reported that the pay bump allowed them to better support their family and reduce reliance on their parents. Research from the University of California Berkeley’s Center on Wage and Employment Dynamics found the average pre-policy wage for fast-food workers was $17.13 an hour,resulting in an average 17% pay increase. A University of Kentucky report indicated that while hiring slowed, worker turnover decreased, offsetting the hiring slowdown.
While some restaurants have cut back on hours, research from the Shift Project found no immediate evidence of reduced scheduled hours or understaffing. Though, anecdotal evidence suggests some restaurants have reduced hours. Analysis of Bureau of Labor Statistics data by the Employment Policies Institute suggests roughly 16,000 fast-food jobs have been eliminated in California as the law’s passage, a figure disputed by researchers at UC Berkeley who found no related job losses when adjusting for seasonal fluctuations.
Governor Newsom, widely considered a potential 2028 presidential candidate, continues to tout the policy as a success, stating on X in August 2024, “After raising the minimum wage for workers, California now has 750,500 fast food jobs – the MOST in state history! California’s fast food industry continues to boom every single month with workers finally receiving the wages they deserve.”
The California experiment continues to be closely watched, offering valuable insights into the complex interplay between minimum wage policies, economic realities, and the evolving landscape of the fast-food industry.
