Trump Says California’s $20 Fast-Food Wage Is Destroying Businesses — The Reality Is More Complicated

When President Donald Trump told a room full of McDonald’s operators that California’s governor was “laying siege on the minimum wage,” he was channeling a fear widely shared on the political right:

that the $20 fast-food minimum wage would destroy one of America’s most iconic industries.

But the reality one year later is far messier — and far more interesting — than the narrative suggests.

Because even though labor costs jumped, menu prices climbed, and operators faced real financial pain…

California’s fast-food ecosystem didn’t implode.

Turnover dropped.

Restaurants kept operating.

Chains continued opening new locations.

And workers — for the first time in decades — felt a sense of financial breathing room.

This is not a simple story of success or failure.

It’s a case study in how modern labor economics actually works.

Yes, Wages Jumped. No, the Industry Didn’t Collapse.

When California raised the fast-food floor to $20/hour in April 2024, critics predicted:

mass closures

skyrocketing unemployment

franchise bankruptcies

a statewide fast-food shortage

That didn’t happen.

Instead:

Turnover declined

Industry headcount hit 750,500 — the highest in state history

California added 2,300 fast-food restaurants from Q1 2024 to Q1 2025

Openings outpaced the national average

Chains still value California’s massive consumer base, even if it costs more to operate.

The fears of a mass wipeout never materialized.

Workers Are the Clear Winners — Even When Hours Get Cut

For many workers, the change has been life-changing.

Take Zane Marte, a Jack in the Box employee who watched his pay rise from the teens into the $20 range.

Suddenly he could:

buy groceries on his own

help support his family

work fewer hours without falling behind

“Before the raise, I could barely cover my basics,” he said.

“Afterward, I finally had some room to breathe.”

Researchers at UC Berkeley found the average pay increase was 17%, and turnover dropped significantly — one of the biggest operational headaches in fast food.

Even with scattered hour reductions at some locations, most workers came out ahead.

Higher wages worked — at least for the people earning them.

But Franchisees Are Not Imagining the Pain

Trump’s warnings weren’t completely baseless.

Franchise operators are struggling — sometimes intensely.

Labor is the biggest cost in fast food, often targeted at 30% of total expenses.

When that cost jumps overnight, something has to give.

Franchisees reported:

slumping sales

inability to offset costs without raising prices

frustrated customers

reduced staffing hours

closures in the most unprofitable locations

Harshraj Ghai, who runs 200+ Burger King, Popeyes, and Taco Bell units, raised prices 10–12%.

It still wasn’t enough.

He has closed about 10 locations in California — and expects to close 12 more.

For him, Oregon stores remain “significantly more profitable.”

Some franchisees turned to:

AI drive-thru systems

automated mixers

precooked ingredients

deep operational cuts

This isn’t panic — it’s adaptation.

Why California Targeted Fast Food Specifically

Owners say the industry was “unfairly singled out.”

Grocery store and retail workers didn’t get the same pay bump, even though many earn minimum wage too.

Voters also rejected an $18 statewide minimum wage in 2024.

California was willing to raise wages —

but only for fast-food workers.

Why?

Because the sector’s turnover crisis was severe, and unions fought aggressively for this category.

It was a targeted victory, not a universal reform.

Job Losses: Real or Exaggerated?

This is the most contentious part of the entire debate.

Opponents of the wage hike claim:

16,000 jobs lost since the law passed

But UC Berkeley researchers argue that’s misleading — and that seasonally adjusted data shows no significant job losses.

Sorting truth from political spin isn’t easy.

Some job loss clearly occurred.

But the statewide expansion of new restaurants complicates the narrative.

This is a mixed bag — not an apocalypse.

Immigrant Workers Feel the Heat From Trump’s Rhetoric

For many California operators, another factor is adding pressure: immigration fear.

“Our employees are predominantly Latino, and they’re terrified,” said one Los Angeles McDonald’s owner.

Trump’s harder tone on immigration is creating workplace anxiety, especially among workers who make fast food run day to day.

Economic stress and political fear are mixing in ways that complicate every labor metric.

The Big Picture: A Stress Test for the Future of Low-Wage Work

If California had collapsed under the weight of the $20 fast-food wage, the national debate would be over.

It didn’t.

Instead, we got:

higher wages

reduced turnover

expensive operational adjustments

some closures

more automation

a still-growing industry

The truth is both simpler and more challenging:

California proved that raising wages doesn’t kill industries — but it does force them to evolve.

Whether that evolution is sustainable long-term is a different question.

Final Line

California’s fast-food wage didn’t destroy the industry — it transformed it.

And in the battle between politics and data, the truth is far more complex than either side admits.

Author’s Note

This article was created with the assistance of advanced AI — a tool I will continue using to analyze policy, decode economic narratives, and deliver balanced reporting in a world obsessed with extremes.