Lion data exclusive: Minimum wage hikes hurt fast-food workers nationwide, not just in California

A higher minimum wage leads to job losses for fast-food workers, dealing a blow to social justice advocates who say it helps poor workers.

An analysis of employment data from the Bureau of Labor Statistics (BLS) shows that in states that raised the minimum wage in 2024, fast-food workers have lost their jobs at a much higher rate than nationwide.

It also shows that new fast-food restaurants tended to open with fewer workers.

The Lion’s analysis is a follow-up to a previous report about job losses in California for fast-food employees due to minimum wage increases.

In that report, Berkeley Research Group (BRG) used BLS data to show that California quick-serve restaurants cut almost 11,000 jobs from June of 2023 to the third quarter of 2024, the last quarter for which data is available. 

“The BLS QCEW – the dataset that most accurately reflects employment trends in the restaurants impacted by [the minimum wage increase] – shows [fast-food restaurants] lost 10,700 jobs (-1.9%) between June 2023 and June 2024,” writes BRG.  

Using federal data, The Lion pulled out employment numbers for fast-food restaurants for 23 of the 24 states that raised the minimum wage in 2024, including California. 

The Lion excluded Nevada, because the state’s minimum wage increase wasn’t enacted until July of 2024. 

The BLS numbers show that fast-food workers lost 23,987 jobs nationwide, with 23,106 or 96.33% of the losses coming in states that raised the minimum wage in 2024.  

Hardest hit were California, New York, Illinois, Ohio, Missouri, Maryland and Michigan. 

If one subtracts the year-over-year losses from California, nationwide job losses total about 8,000, with nearly 7,000, or 88.74%, in states that hiked the minimum wage. California may have lost as many as 16,000 jobs over the last year, depending on which set of numbers is used. 

The Golden State’s losses were especially high because it boosted entry pay for fast-food workers to $20.00 per hour, while keeping the minimum wage for other workers at $16 per hour. Minimum wage hikes don’t only affect new workers but force businesses to raise pay for any existing workers who were making less than the new amount. 

States that raised the minimum wage now have an average entry wage of $13.27 per hour, an increase of nearly 7%. 

Those wage increases may be one reason why fast-food inflation took center stage in 2024, as prices continued to soar under wage pressures. Menu prices at quick-serve restaurants were up 4.3% year-over-year as of August 2024. Inflation as a whole was 2.9% at the end of 2024. 

Fast-food employment, which totals about 4.6 million jobs in the U.S., remained stable for the states that did not raise minimum wage (net loss of 881 jobs total). 

However, the industry faces other troubles, too. 

Across all restaurants, wages are only up about 5% year-over-year, while average hours have dropped. Unemployment rates for restaurant workers have also been inching up over the last year, approaching levels not seen since the pandemic lockdowns. 

As BRG noted, employment in the fast-food sector typically enjoys growth, not contraction.  

“This decline sharply contrasts with the sector’s historically compounded annual growth rate of 2.5% and marks the only December year-over-year decline in fast-food employment this century – excluding the Great Recession (2009) and the COVID-19 pandemic (2020),” the authors noted about the Golden State’s fast-food job implosion.  

It doesn’t look like it will get much better – for California at least.  

A new union created by liberals to increase the minimum wage for fast-food workers is back at the table asking for an annual, automatic 3.5% pay increase, even as their members complain they’re not making as much money as they used to because of hours being cut.  

“So, to go from having regular hours to now 20 to 25 [over two weeks], it makes me really sad,” Gilberta Acevedo, a San Jose Taco Bell worker, told the Pleasanton Weekly.  

Previously, California’s Democrat Gov. Gavin Newsom claimed the minimum wage increases actually created jobs. 

But as The Center Square points out, Newsom was simply citing a report that falsely used seasonal fluctuations in data to make that claim, comparing winter months, which generally see a decline in fast-food jobs, to summer months, which generally see an increase in those jobs. 

The data compiled by The Lion also revealed that in states such as Maryland and Illinois, the number of quick serve restaurants increased substantially even while the total number of workers in the sector decreased. 

Maryland added more than 400 restaurants, a nearly 8% increase, but shed almost 400 workers at the same time. Illinois saw 366 establishments open and 1,245 fewer workers. 

California, which has the highest minimum wage for fast-food workers, was the most dramatic: 1,418 restaurants opened and 16,161 workers lost their jobs.