FRIES COST MORE: The Effects of $20/Hour Minimum Wage on Fast Food

This episode of Broeske and Musson examines the real-world consequences of California's $20/hour minimum wage law for fast food workers, enacted in April 2024 as part of Assembly Bill 1228. Hosts John Girardi and Christina Musson critique the policy's unintended outcomes, citing a UC Santa Cruz study that confirms predictions: reduced employee hours, job losses, increased automation (kiosks, mobile ordering, AI drive-throughs), and higher menu prices. They highlight how smaller chains like Foster Freeze couldn't afford the wage hike and went out of business, while larger chains like Taco Bell adapted through technology. The discussion extends to broader implications, including Los Angeles and Alameda County’s proposed $30/hour minimum wage for hotel workers, which has already led to reduced housekeeping services and guest opt-outs. The hosts argue that policymakers ignored basic economic principles—specifically, the law of supply and demand and Newton’s third law of motion (every action has an equal and opposite reaction)—and failed to consider how businesses would respond. They criticize California’s pro-labor environment as overly burdensome for small employers, calling for a reevaluation of the state’s economic orthodoxy.