California Governor Gavin Newsom might have believed that implementing a $20 minimum wage for most fast-food workers would seamlessly avoid the pitfalls of free-market economics.

Unfortunately, that’s not the case.

The Democratic governor seems to subscribe to the misconception that government interference in the private sector will lead to favorable results.

It often does not.

The law came into effect in April, and within ten months, California lost over 6,000 fast-food jobs, marking about a 1.1% decline in employment in that sector, based on an analysis of federal labor data.

In contrast, during the same period a year earlier, the fast-food industry in California saw a 3.1% growth, adding over 17,000 jobs before the law was enacted.

While California was experiencing job losses, fast-food outlets across the U.S. actually created approximately 74,000 new jobs, representing a 1.6% increase during the same period, according to a review by the Employment Policies Institute, which opposes government-mandated wage hikes.

“Newsom severely impacted the restaurant industry when he approved the $20 minimum wage law for fast food,” said Rebekah Paxton, EPI’s research director, in a statement. “Thousands of jobs have been lost, and the sector is in turmoil.”

Upcoming minimum wage increases in 2025

California’s job losses were entirely foreseeable. The state had already started to shed hundreds of fast-food employment opportunities prior to the law’s implementation, as noted by The Wall Street Journal.

Although higher wages sound appealing and are often promoted by liberals as a means to enhance workers’ living standards, the reality is that such increases can lead to negative side effects for businesses. This may result in reduced work hours, decreased benefits, increased automation, and job losses. Additionally, customers may face higher prices.

One of the most significant drawbacks, however, is that raising the minimum wage can adversely affect entry-level workers seeking their first job. Without flexibility in wage rates, businesses are inclined to hire more seasoned candidates instead.

Despite these anticipated outcomes, 21 states and various cities and counties are planning to increase their minimum wages on January 1, with others slated to follow later. Many of these new wages will exceed $15 per hour.

Meanwhile, the federal minimum wage remains unchanged at $7.25.

When these new wage increases take effect, it will provide another chance to observe the real-world effects of mandated wage hikes.

Positive news: Californians oppose another wage hike

In the recent presidential election, which largely focused on economic issues, even California voters displayed skepticism towards raising the minimum wage.

They voted against a proposed measure that aimed to gradually increase the minimum wage to $18 an hour for all jobs, the highest in the nation. This marks the first failure of a statewide ballot measure to raise the wage in nearly three decades in the United States.

Similarly, voters in Massachusetts overwhelmingly rejected a proposal to elevate the minimum wage for tipped workers to match the overall minimum wage.

Jennifer Barrera, CEO of the California Chamber of Commerce, stated that the California proposal would have led to increased costs for small business owners and consumers alike.

“With the economy and rising costs at the forefront for many voters this election, this message clearly resonated,” she noted.

While liberals advocate for assistance to individuals, they must also consider the actual consequences stemming from their well-intentioned policies.