**In Case You Missed It**
***UPDATED REPORT***
For Immediate Release: March 30, 2026
Contact: Molly Weedn, molly@weednpa.com
Santa Cruz, CA – Researchers at the University of California, Santa Cruz have released an updated working paper analyzing the statewide impacts of California’s $20 fast food minimum wage law under AB 1228.
The study, “Let Them Eat Big Macs, Crunchwraps, and Whoppers,” finds that the policy has led to widespread unintended consequences for workers, consumers and small business owners across California.
“While this study focuses on Santa Cruz, the impacts are being felt over the hill in Santa Clara County where we’re seeing the same trends,” said Joseph Marques, a San Jose Restaurant Owner. “Our County Board of Supervisors are currently considering another direct attack on fast food restaurants, which will certainly add to the negative outcomes we’ve already seen from AB 1228.”
Using a combination of statewide labor data and on-the-ground interviews with restaurant operators, researchers found consistent patterns across regions, including:
- Higher menu prices for consumers as restaurants pass along increased labor costs
- Reductions in employee working hours
- Widespread elimination of overtime
- Loss of benefits for employees
- Accelerated investment in automation
- Spillover impacts on small businesses not directly covered by the law
The study concludes:
- “It is clear that the people of California have been left with substantially higher menu and related prices as a direct result of AB 1228 with businesses across the board facing higher wage costs and associated profitability issues.”
- “This working paper shows that all types of businesses, as well as consumers, have been hurt by this legislation through a myriad of unintended consequences. Employees of franchised fast food restaurants have seen reduced hours, the elimination of overtime, and lower numbers of employees eligible for benefits.”
“Unfortunately, this research confirms exactly what restaurant owners have been dealing with since the passage of AB 1228,” said Juancarlos Chacon, a Los Angeles Restaurant Owner. “We have been forced to raise our menu prices to keep our doors open, and in this economy, we know that negatively impacts our customers. This should be a warning to cities and counties considering even more mandates on our small businesses. When policies ignore economic realities, the consequences ripple across workers, small businesses, and entire communities.”
Local restaurant owners interviewed in Santa Cruz reported raising prices multiple times in a single year and struggling to compete for workers offering $20/hour wages nearby.
The study’s findings are reinforced by broader economic trends across California:
- Food Prices: Food prices at California fast food restaurants have increased by more than 21 percent since 2023, far outpacing statewide inflation which has risen 6.1 percent based on the most recent available Consumer Price Index data.
- 25,704 Jobs Lost: Seasonally-adjusted data from the U.S. Bureau of Labor Statistics’ Current Employment Statistics (CES), shows California lost 25,704 fast food jobs since AB 1228 was signed into law in September 2023.
- Reduced Employee Hours: According to the U.S. Census Bureau and Bureau of Labor Statistics’ Current Population Survey – Outgoing Rotation Group (CPS-ORG), non-tipped restaurant workers in California lost a median of 5 hours per week after AB 1228 took effect—equivalent to nearly seven weeks or two months of work per year.
- A survey of local restaurant owners confirms this data: Nearly 90% of local restaurant owners impacted by the $20/hour minimum wage reported reducing employee hours to offset rising costs, with 87% planning additional cuts over the next year
Restaurant Closures: Since AB 1228 was signed into law, fast food restaurants across California have been forced to close locations, delay new openings, or consolidate operations to absorb sharply higher labor costs, particularly in high-cost areas such as Los Angeles and Santa Clara counties.
Each closure means fewer affordable meal options for families, fewer entry-level jobs, and fewer pathways to small-business ownership—especially in communities that rely on fast food restaurants as neighborhood anchors.