When California lawmakers pushed the minimum wage for fast-food workers from $16 to $20 an hour in April 2024, they framed the move as a straightforward act of compassion. Governor Gavin Newsom declared it would help families keep pace with the rising cost of living in one of the nation’s most expensive states. The rhetoric was familiar: government would right the scales, workers would finally earn a living wage, and prosperity would follow. Less than two years later, a study from the University of California, Santa Cruz has laid bare the gap between promise and reality. Far from lifting workers up, the policy has narrowed their opportunities, raised costs for everyone, and sped the very automation that critics warned would follow.
Stephen Owen, an economics lecturer at UC Santa Cruz, examined the aftermath of Assembly Bill 1228 and found what free-market thinkers have long predicted. Labor costs for fast-food operators jumped roughly 25 percent. In response, businesses did what any rational enterprise must do when input prices rise: they cut other expenses. The result has been fewer shifts, trimmed overtime, and the quiet erosion of benefits that once supplemented paychecks. Owen’s report is blunt. “The results indicate a plethora of negative outcomes such as higher menu prices for consumers, reductions in employee working hours, widespread elimination of overtime and loss of benefits for employees. Further decreases in employee opportunities are being driven by automation and the adoption of labor replacement technologies is accelerating.”
Those technologies are no longer theoretical. Chains across California have rolled out self-order kiosks, AI-powered drive-thru ordering, and mobile-app systems that once seemed like novelties. What was once a slow evolution driven by convenience has become an urgent cost-saving necessity. A single kiosk does not demand health insurance, overtime pay, or breaks. It simply processes orders. For workers who once relied on entry-level restaurant jobs as a first rung on the economic ladder, the ladder itself has grown shorter.
Blanket wage increases were poorly thought out.
And they still can’t count change correctly!
At McDonalds… when change id to be returned to the customer
Pictures of what change looks like pops up for cashier
At McDonalds the manager came out with a calculator to subtract 5 dollars from a ten dollar bill… the manager was just as dumb
The employee could not understand the picture of changed displayed on her cash register