Two years after signing the FAST Recovery Act, the promises of benefits for workers and businesses are unraveling, with researchers pointing to steep job losses, cut hours, and rising prices.
When Gov. Gavin Newsom signed the FAST Recovery Act in September 2023, he hailed it as a “win-win-win,” helping fast-food workers, restaurant owners, and consumers.
The law established a Fast Food Council with the authority to set minimum wages sector-wide and paved the way for a $20 hourly minimum wage for fast-food workers in chains with 60 or more outlets, effective April 1, 2024.
At the time, proponents argued it would uplift low-wage workers and curb labor abuses. However, two years later, critics—especially the Employment Policies Institute—argue that the results contradict the rhetoric.
In its “Crisis in California” brief, EPI polled fast-food owners, reporting that 98% have already raised menu prices, 89% have reduced employee hours, and 70% have consolidated staff or cut positions.
They warn that many restaurants expect further reductions, and some estimate the cost per location to exceed $100,000.
The law’s defenders push back. A UC Berkeley/IRLE-funded study argued that wage hikes increased worker income without triggering job losses or major price disruptions.
However, EPI counters that the Berkeley figures overlook federal employment data showing more than 4,400 fast-food jobs lost since January 2004, and disputes the anecdotal basis of the Berkeley findings.
Meanwhile, a Pepperdine/Beacon Economics white paper released this year calls the job-loss trend “a wake-up call,” warning that the law’s steep wage mandate created economic consequences especially harmful to entry-level workers.
The bold vision Newsom sold is colliding with economic realities. The “wins” for workers, business, and customers seem to be giving way to higher prices, reduced hours, fewer jobs, and pressure to automate or shutter locations.
