**Study Connects California QSR Wage Hikes with Job Reduction**
In 2023, California Governor Gavin Newsom signed Assembly Bill (AB) 1228 into law, raising the minimum wage for many employees of national fast-food chains to $20 per hour. Initial research from the University of California-Berkeley’s Labor Center suggested that this wage hike led to higher earnings for fast-food workers without causing job losses.
However, a more recent study conducted by Pepperdine University’s School of Public Policy, in collaboration with Beacon Economics, presents a different perspective. According to their findings, the limited-service restaurant sector in California lost 23,100 jobs since April 2024, when AB 1228 took effect. This represents a 3.2% decline in sector employment—significantly contrasting with the 0.8% growth seen across the broader U.S. fast-food industry during the same period.
“The findings suggest that early claims of the Fast Act’s success were premature and based on incomplete data,” noted the authors of the white paper titled *Jumping the Gun on the Fast Act*.
Christopher Thornberg, PhD, Founding Partner of Beacon Economics and principal author of the white paper, based his analysis on the California Employment Development Department’s revised employment report released in March 2025. This report updated job estimates for the previous 18 months, revealing a downward revision of 92,100 payroll jobs statewide. Notably, limited-service restaurants saw a revision of 21,500 fewer jobs in December alone—a 2.5% decrease.
The study warns that as more data becomes available, AB 1228 may show broader negative impacts beyond the initial employment figures, including reduced work hours and an increase in closed restaurants.
Thornberg emphasized that earlier analyses of the wage policy were based on preliminary data, which failed to reflect the true employment trends. “Each year, California revises its employment data through a process called benchmarking, which aligns preliminary estimates with more accurate and comprehensive data,” he explained. “These revisions can lead to meaningful changes in previously reported job gains or losses.”
He also highlighted a data nuance: nearly half of the quick-service restaurants (QSRs) included in the reports are not part of national chains and therefore are not required to comply with the $20 minimum wage. These outlets may have experienced more stable or even growing employment, which Thornberg suggests could be masking more significant job losses among the businesses that are subject to the law.
Ultimately, the study concludes that the early optimism regarding AB 1228 was likely unfounded. “This new data should be a wake-up call for policymakers,” Thornberg stated. “The employment losses in California’s fast-food industry are now evident, and they confirm what many had warned about: drastic wage hikes create real economic consequences, especially for entry-level workers.”
