The lessons of California should be kept front of mind as Gov. Gavin Newsom and other supporters of the law aim for further minimum wage increases and to export their failures nationwide; Over 22,000 jobs lost, 14.5% increase in food prices, 9 in 10 restaurants cutting hours

WASHINGTON, D.C. – Today, the International Franchise Association (IFA) issued the following statement marking 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 percent 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.”

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

One year after the minimum wage hike went into effect:

• 22,717 Jobs Lost: New seasonally-adjusted data from the U.S. Bureau of Labor Statistics’ Current Employment Statistics (CES) released last week shows California lost 22,717 quick-service restaurant jobs since AB 1228 was signed into law in September 2023.
• 14.5% 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% – nearly double the national average of 8.2% since September 2023.
• Nearly 90% of Impacted Restaurants Cut Employee Hours to Offset Costs: A survey of impacted local restaurant owners revealed that 89% reduced employee hours to offset rising costs, with 87% planning additional cuts over the next year.

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About the International Franchise Association:

Celebrating over 60 years of excellence, education, and advocacy, the International Franchise Association (IFA) is the world’s oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations, and educational programs to protect, enhance and promote franchising and the approximately 830,000 franchise establishments that support nearly 8.8 million direct jobs, $896.9 billion of economic output for the U.S. economy, and almost 3 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees, and companies that support the industry in marketing, law, technology, and business development.