Two years after California’s FAST Recovery Act introduced a $20 minimum wage for fast-food workers, the law is facing backlash over its unintended economic consequences. Initially celebrated as a major victory for labor rights, the legislation is now associated with significant job losses, business closures, and rising consumer costs.

According to the Employment Policies Institute (EPI), nearly 20,000 fast-food jobs have disappeared in California since the law’s implementation—about a quarter of the nationwide total during the same period. High labor costs are widely cited as the main driver, affecting both large chains and small franchises.

Several businesses have responded by reducing staff or shutting down entirely. Notably, two major Pizza Hut franchisees laid off over 1,200 delivery drivers, while other chains like Mod Pizza and Foster’s Freeze have closed locations. Many small-business owners say they’re struggling to stay open under the financial strain.

To offset rising costs, restaurants are cutting worker hours and investing in automation. EPI notes that non-tipped employees are losing an average of 250 work hours annually—amounting to around $4,000 in lost income based on previous wages. This trend raises concerns about workers’ long-term financial stability.

Consumers are also feeling the impact. Fast-food prices in California have jumped more than 13% since April 2024—almost twice the national average—putting added pressure on families already grappling with inflation.

While supporters argue the law has broader benefits, mounting criticism suggests a growing disconnect between the policy’s goals and its real-world effects.