Donald Trump took aim at California Governor Gavin Newsom, saying the governor is attacking the minimum wage. He was referring to California’s $20 hourly wage for fast food workers at large chains. The claim sounded sharp, but the numbers so far do not support a crisis. Fast food restaurants have not collapsed, and turnover among workers has dropped.

How the Wage Hike Happened

California set a special minimum wage for fast food workers at chains with more than 60 locations. It became law in April 2024 and pushed pay from the statewide $60 to $20 an hour. A new state council now has the power to review and raise these standards each year.

This rule came after months of fighting between unions and restaurant groups. Unions pushed for better pay and more stability. Restaurant owners argued they were being singled out. A compromise eventually passed, but tensions remained.

Pressure on Restaurants

Restaurant operators already work with tight margins. Labor takes up a large share of costs. When wages rose, owners had to make quick adjustments while dealing with higher food prices and fewer customers eating out.

Los Angeles franchise owner Kerri Harper Howie said her McDonalds locations raised prices by less than 10%. She could not go higher because many customers earn the regular minimum wage and would not be able to afford the food. Her sales dropped for more than a year before improving again.

Other operators survived only by taking bigger steps. Harshraj Ghai, who runs more than 200 fast food locations across California and Oregon, raised menu prices by about ten to 12%. It still did not cover the new labor costs. He cut hours, experimented with AI for drive-thru orders, switched to pre-cooked items, and added more automation.

Some locations could not survive the stress. Ghai closed around ten California stores and expects more closures. He said this pattern is far more severe than what he sees in Oregon, where his restaurants are more profitable and no closures have been necessary.

On top of wage pressure, operators dealt with wildfire disruptions, rising insurance rates, and concerns among immigrant workers tied to national politics. Some franchisors decided to step back from running stores directly and shifted toward relying on franchising fees instead.

Growth That Surprised People

Even with all the challenges, California added nearly 2300 fast food restaurants between early 2024 and early 2025. That is a 5% increase, faster than the national rate. So while some owners struggled, the overall market continued to expand.

What Workers Gained

Many workers said the higher wage helped them breathe. Even when some hours were cut, the extra pay meant they brought home more money. Workers like Zane Marte, who spent years at Jack in the Box, said the twenty-dollar wage gave him more room to support his family.

Research supported these experiences. Hiring slowed, but turnover dropped enough to balance out the shift. Workers stayed longer because the jobs paid better. Fears that other industries would have to raise wages did not play out, and studies found no evidence of spillover to full-service restaurants or other low wage fields.

Some workers still saw fewer scheduled hours. One worker in Los Angeles said her hours went down, but the higher pay let her save money for the first time.

Jobs and Politics

Experts disagree on job losses. One group claimed California lost around 60,000 fast food jobs. Another group said the data did not show losses once seasonal patterns were accounted for. The debate is still active.

Governor Newsom continues to stand behind the policy. He points to record fast food employment in the state and calls the wage hike a success. Other states are watching closely but have not adopted similar rules.

For now, California is running a real-time test of how far wages in fast food can go, and both workers and owners are dealing with the results in very different ways.