AB 1228 — signed Sep 2023, effective Apr 2024.
AB 1228 set a $20/hour floor for limited-service restaurants in chains with 60+ locations nationwide — roughly 525,000 workers at ~30,000 establishments. A Fast Food Council can adjust the rate annually (capped at the lower of 3.5% or CPI). No 2026 increase has been enacted; a discussed 70-cent COLA bump has stalled since the council chair resigned mid-2025.
Exempt: bakeries producing on-site stand-alone bread items (as of Sep 15, 2023); restaurants in airports, hotels, event centers, theme parks, schools, museums, and gambling establishments. Cities cannot set higher fast-food-only minimums.
Net jobs vs. counterfactual. Same law, very different numbers.
Reported price increases for fast-food menu items, percent.
Note: Owen (UCSC) reported a range of 8–12%; midpoint shown.
Method, finding, and the most defensible critique of each.
Method. Glassdoor + Square payroll, Advan cell-phone proximity (4-hr stay = worker), DoorDash prices.
Finding. Wages +11%. Employment unchanged. Prices +1.5%.
Caveat. GPS proxy mistakes lingerers and delivery drivers for staff; geofencing imprecise in strip malls.
Method. Survey of 3,420 CA fast-food workers vs. 6,194 CA retail and 14,416 out-of-state controls.
Finding. Share earning <$20/hr fell 60+ pp. No reductions in hours, scheduling, or benefits.
Caveat. Captures incumbents only — by design misses workers who lost jobs and exited.
Method. BLS QCEW administrative payroll data (95% of US jobs). Difference-in-differences vs. rest of US.
Finding. CA fast-food employment −2.7% to −3.9% vs. counterfactual. Implied elasticity −0.09 to −0.16.
Caveat. NAICS 722513 includes restaurants not covered by AB 1228; elasticities at upper end of literature.
Method. Self-reported survey of 182 operators (Jul 2024) + CPS-ORG hours analysis + ongoing QCEW tracking.
Finding. 98% raised prices, 89% cut hours, 73% cut OT. Median worker −5 hrs/wk (~$4,000/yr).
Caveat. Industry-funded (Berman & Co.); operator survey non-random and self-selected.
Method. Datassential menu price data, Sep 2023 → Oct 2024. Industry consultancy, not academic.
Finding. CA fast-food prices rose ~2× the national average over the comparison window.
Caveat. Not peer-reviewed; baseline window includes pre-implementation moves and food inflation.
Method. Interviews with 100+ franchise owners/managers + financial and hiring records review.
Finding. 21% shift-work decline at one Burger King group; 12% labor-hour drop across 18 McDonald's. Prices +8–12%.
Caveat. Qualitative-heavy, no formal control group; sector automation predates AB 1228.
Same law, different instruments — different answers.
Worker surveys, payroll-platform data, and cell-phone proximity proxies. Captures wage gains and incumbent experience well. Misses workers who exited; Advan GPS data has known imprecision in clustered retail environments.
BLS QCEW administrative payroll data — gold standard for sector employment counts. Captures aggregate effects, but NAICS classification includes establishments not covered by AB 1228, blurring the law's direct effect.
Both the "win-win-win" and "job-killer" framings are too clean. The defensible read: covered workers got a real 10–18% wage gain. About 16,000–19,000 net jobs were lost relative to the counterfactual, and the median retained worker lost roughly 5 hours per week. Prices rose more than Reich's 1.5% but less than industry's 14.5% — most likely 4–8% on average. Capital substitution (kiosks, AI ordering) is the longest-tail effect.
The unanswered welfare question is whether the gains to retained workers exceed the losses to displaced workers and consumers. No study has cleanly answered that.