President Donald Trump criticized California Governor Gavin Newsom’s minimum wage policy at the McDonald’s Impact Summit. California’s fast-food workers have seen increased wages, but turnover is down, restaurants are still opening, and closures have not been widespread. The higher wages have put pressure on restaurant chains and led to price increases for consumers.

Fast-food workers in California started earning $20 an hour in April 2024, a 25% increase from the state’s minimum wage. The legislation also establishes a council to recommend industry standards and raise the minimum wage annually. The industry reached a compromise after months of fighting, with SEIU supporting the legislation and quick-service restaurants opposing it.

California voters rejected a ballot measure to raise the statewide minimum wage to $18 an hour, marking the first time in nearly three decades that a minimum wage hike was turned down on a state ballot. Other states have yet to follow California’s lead in increasing the minimum wage, as the impact of the policy continues to be monitored.

Restaurant operators in California have faced challenges with higher labor costs due to the wage hike, on top of commodity inflation and weak consumer spending. Franchisees have had to raise menu prices, cut labor hours, and adopt technologies to offset the increased costs. The restaurant industry as a whole struggles with narrow profit margins.

The mandated pay hike in California has been a win for workers, even if it means fewer scheduled hours. Research shows that the average pre-policy wage for fast-food workers in California was $17.13 an hour, with an average hourly pay hike of about 17% after the $20 minimum wage took effect. Turnover has decreased, but hiring for fast-food jobs has slowed down.

Read more at CNBC: Trump criticizes California $20 fast food minimum wage