California’s $20 minimum wage for fast-food workers took effect on Apr. 1.

While the legislation has faced criticism, Gov. Gavin Newsom is celebrating its impact.

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“Since the law was enacted, California has added 11,000 new jobs in the industry. As of July, our state boasts a historic 750,500 fast food jobs,” he wrote in a recent op-ed for Fox News, citing data from the Bureau of Labor Statistics.

According to Newsom, California now has more fast food jobs than ever before.

He also highlighted how the legislation has improved conditions for those working in the fast food sector, stating, “Because of California’s compassion for working people, these men and women living paycheck to paycheck now enjoy better working conditions, reduced financial stress and greater opportunities for upward mobility.”

However, not everyone shares Newsom’s enthusiasm. Celebrity chef and restaurant owner Andrew Gruel dismissed the op-ed as “typical Gavin Newsom self congratulatory propaganda based on questionable data.”

“I think it’s a little early to put the book on the shelf and take the victory lap here,” Gruel told Fox Business, cautioning that it may be too soon to fully assess the long-term effects of the wage hike on the industry.

Analyzing the numbers

Gruel raised concerns about the accuracy of Newsom’s claims.

“These aren’t even seasonally adjusted numbers,” he noted, referring to the data cited by the governor.

Experts have echoed Gruel’s concerns about the lack of seasonally adjusted data.

“So the governor is saying that the data shows California has the highest fast food employment it’s ever had. Unfortunately, he’s using a preliminary data set released by the Bureau of Labor Statistics,” Rebecca Paxton, research director at the Employment Policies Institute, told KTLA. “The latest set that the Bureau of Labor Statistics releases is called seasonally adjusted, which is what economists use to measure policy impacts,”

The distinction is significant because seasonally adjusted data accounts for typical seasonal employment fluctuations, such as temporary hiring spikes during holidays or reduced staffing in slower months. Seasonal adjustment provides a clearer picture of underlying trends by smoothing out these predictable variations. Without this adjustment, unadjusted numbers can present a skewed perspective, potentially misleading when assessing long-term policy impacts.

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Gruel also questioned the timeframe of Newsom’s analysis.

“He’s using like, nine or 10 months, and really it’s only been three months in this data in which the bill actually took effect,” he explained. “In the grand scheme of 750,000 jobs isn’t a huge number.”

However, Newsom’s breakdown did reveal some promising short-term figures. It showed that in April 2024, California’s fast food industry employed 739,500 workers. This number grew to 743,300 in May, 744,700 in June, and reached 750,500 by July. This means that between April and July — a period of just three months — the state added 11,000 fast food jobs

‘Unintended consequences’

Gruel argued that even if Newsom’s numbers are accurate, they fail to capture the full picture due to the “unintended consequences” of the legislation.

One major consequence, according to Gruel, is the reduction in worker hours, which inflates job creation statistics without genuinely benefiting employees.

“The first thing that these multi-unit restaurants did when they found out about this bill was they took people who were working overtime — so anything over 40 hours — and they cut their hours down to 25 or 30. Those people went and got other jobs,” he explained.

Gruel pointed out that instead of having one person work 55 or 60 hours a week, restaurants now split that position between two employees working 30 to 32 hours each. This appears as job growth on paper.

He shared insights from his own experience as a restaurant owner, observing a noticeable increase in fast food workers seeking additional employment since the law took effect.

“I know that because starting in at roughly April, we got flooded on the full-service side with people who were looking for a second job because they weren’t allowed to work overtime anymore, and this was in our restaurants, and we still are getting flooded from fast food workers looking for another job,” he recounted.

Read more: Rich, young Americans are ditching the stormy stock market — here are the alternative assets they’re banking on instead

Some restaurants have closed

Gruel’s concerns align with classical economic theory, which suggests that setting a wage floor above the market equilibrium can lead to unintended consequences. Employers, faced with higher labor costs, may reduce hiring, cut workers’ hours, or even eliminate positions altogether to maintain profitability. This is especially problematic for low-wage workers with less experience or skills, who are more vulnerable to these changes.

California has seen a consistent and significant increase in its minimum wage over the past decade. In 2014, the state’s minimum wage was $9.00 an hour. Today, it’s set at $16 an hour, rising to $20 an hour for fast food workers. For some business owners, this increase has forced difficult decisions.

A Fosters Freeze outlet in Lemoore shut down on April 1, leaving its workers without jobs. Its owner, Loren Wright, said in a text to KMPH that the substantial rise in minimum wage has made it challenging for small businesses to stay afloat.

Lawrence Cheng, whose family owns seven Wendy’s locations south of Los Angeles, admitted to cutting his staff’s hours due to the minimum wage increase.

“We kind of just cut where we can,” Cheng told the Associated Press. “I schedule one less person, and then I come in for that time that I didn’t schedule and I work that hour.”

However, there are alternative economic theories, such as the efficiency wage theory, which argue that higher minimum wages can boost worker productivity and reduce turnover, as better-compensated employees may be more motivated and loyal. Additionally, increased wages can boost consumer spending, as low-income workers have more disposable income, potentially stimulating economic growth.

What to read next

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Buildings

Building code delivers: The California Energy Commission (CEC) approved a new building energy code that ensures the vast majority of new homes in the Golden State will be built without fossil fuel connections by 2026. Additionally, spurred by NRDC analysis on the opportunity to replace burnt out AC units with heat pumps that can cool and heat, the new code includes provisions to strongly encourage the replacement of gas rooftop HVAC (heating ventilation air conditioning) units for existing commercial buildings with two-way heat pumps. These units account for roughly 25% of the commercial market in California. A heat pump is nearly identical to an air conditioner with one small but important difference: a reversing valve that allows it to provide heating or cooling. This no brainer is becoming the norm for commercial buildings and needs to be the standard for residential homes too.

Stop investing in fossil fuel infrastructure: There is a growing consensus that it doesn’t make sense to keep investing in the gas pipeline system in California. NRDC commissioned analysis showing that targeted electrification, which equips homes served by aging gas pipelines with energy-efficient electric appliances, can save utility customers more than $20 billion in gas infrastructure costs by avoiding costly pipeline replacements.

Last week, Governor Newsom signed SB 1221 (Min) into law, a bill sponsored by NRDC, Earthjustice, and Building Decarbonization Coalition designed to avoid pipeline replacements. SB 1221 will help ensure that utility spending is aligned with an affordable, clean energy future by increasing transparency into gas utilities’ planned fossil fuel investments and authorizing cost-saving “zero-emission alternative” pilot projects to take place across the state. With this bill, California joined a growing list of states that are closing the chapter on unnecessary gas pipeline investment. 

In July, the California Public Utilities Commission (CPUC) also implemented a decision that removes the subsidies for electric line extensions in new buildings if they connect the building to the gas system – subsidies worth thousands of dollars per home to developers. The decision recognizes that subsidies for new buildings that burn gas are out of step with California’s climate and public health objectives and builds on the previous move to eliminate the gas line extension subsidies for new properties.

Ensuring clean, electric technology is available to all: Getting off fossil gas in buildings requires investing in clean, electric technologies and supporting households with fewer resources to make the transition. California continues to fund this work above and beyond the federal dollars for buildings flowing to the state:

• A total of $525 million was secured for the Equitable Building Decarbonization program, which will provide home repairs and install all-electric appliances in the residences of low-income Californians starting in 2025.
• The $71 million from the Aliso Canyon Settlement paid by SoCalGas was directed primarily to support building electrification in the Los Angeles region (appropriated through AB 157).
• The California Heat Pump Partnership (CAHPP), seeded with state funding, officially launched this year to bring together state agencies, utilities, and manufacturers representing more than 90% of the U.S. heat pump market to help achieve the state’s goal to install six million electric heat pumps by 2030. 

Industry

Digging into industrial emissions: Recently signed by the Governor, SB 941(Skinner) requires CARB to assess emitting industrial technologies and the availability of zero-emission alternatives in its next scoping plan. This assessment is a good first step to take stock of industry’s decarbonization options and should be followed by a comprehensive plan to abate those emissions.

Federal funding for cement decarbonization: Two innovative California-based cement companies secured federal funding awards of nearly $700 million to demonstrate decarbonized cement production processes. Successful adoption of such technologies will be crucial to meeting SB 596, which requires all cement used in the state to be net-zero emission by 2045.

Exploring new rates for industrial electrification: Electric rates that incentivize industrial loads to use clean electricity are critical to industrial decarbonization. While SB 993 (Becker), which would have required just such an industrial rate development, did not advance out of the legislature, the idea did: the CPUC updated the scope of its existing demand flexibility proceeding to develop a new industrial electric rate structure for industrial heat and hydrogen loads. This could price electricity at super low rates when renewables are abundant, and much higher when gas is the marginal resource to incentivize flexible industrial loads to only draw power from the grid when the costs and emissions of doing so are low.

Transportation

Transforming our streets and highways: Two of the three bills NRDC supported as part of the ClimatePlan legislative package were signed into law. SB 960 (Wiener) requires Caltrans to make improvements for people biking, walking, and taking transit when it upgrades state-owned roads. AB 2086 (Schiavo) requires tracking and reporting on how state transportation investments support state goals on safety, equity, climate action, and economic prosperity. Each of these bills advances a key recommendation from our report highlighting gaps between California’s climate goals and its transportation infrastructure spending decisions. NRDC also filed a lawsuit against Caltrans for its unlawful approval of an expansion of Interstate 80 in the Sacramento region.

Defend clean cars rules: NRDC and partners helped block four bills that would have weakened California’s nation-leading clean air standards. We successfully secured the Governor’s vetoes of AB 637 (Jackson), AB 3179 (J. Carillo), Ab 1122 (Bains) and AB 1296 (Grayson), which would have given clean air carveouts for certain rental cars, vehicle fleets, and harbor craft.

Getting EV chargers online faster: NRDC worked to secure new rules from the CPUC to get EV chargers online faster to meet the growing demand for electric cars, buses, and trucks. This decision establishes the nation’s first deadlines for connecting residential, public, and workplace EV chargers to the grid and for California’s three largest investor-owned utilities to make necessary grid upgrades to support large projects like fast-charging plazas for passenger vehicles and charging stations for commercial trucks, while also requiring transparent data on utility compliance. The rule will help lower electricity rates because EV charging brings in more money than it costs utilities to serve, and that net revenue is returned to all utility customers through rates and bills that are lower than they otherwise would be.

Power

Offshore wind gets green light: Developing offshore wind (OSW) is important for California to meet its zero-carbon energy goals, support grid reliability, improve affordability, reduce air pollution, and grow a new industry that will support thousands of high-quality jobs. To advance this effort, the CEC published their final strategic plan, with feedback from NRDC and other stakeholders, which outlines opportunities, challenges, and recommendations to make responsible and equitable offshore wind development a California reality.

In a huge step towards this potential, the CPUC sent the strongest signal yet to advance OSW by adopting a decision ordering 7.6 GW of OSW to be centrally procured by 2035. This determination of need is significant enough to provide certainty for transmission, port, and other infrastructure investments to move forward, and is in line with what NRDC supported in our comments. This decision affirms that offshore wind will play a key role in California’s future energy system and lays the groundwork for market transformation by planning phased procurements to encourage competition and cost reductions.

Progress on Western grid regionalization: A west-wide electricity market would spur the development of clean electricity sources and lower costs for consumers across the region. With the California Independent System Operator’s (CAISO) western day-ahead electricity market approved by the Federal Energy Regulatory Commission (FERC) and poised to bring some of these benefits to the region, an additional effort is underway called the West-Wide Governance Pathways Initiative to take it even further. The Pathways Initiative will both encourage broad participation in the western day-ahead electricity market to capture the value of the resource and geographic diversity of the region, and will create a path to stand up a new governance structure with full independence that could offer more services to the West that go beyond energy markets. 

Equitable rate reform to improve how we pay for shared electric system costs: California is facing an electric rate crisis. NRDC has been at the forefront of identifying solutions, including an income-based monthly charge that more equitably shares the costs for electricity infrastructure while also supporting the transition from fossil fuels to clean electricity. The CPUC successfully adopted this new rate structure in May. This change will help, but more needs to be done in 2025 to reduce electric rates.

Looking Ahead

There’s still significant work needed to build a just and sustainable California, however, the recent progress made across every major sector is worth celebrating. California has the vision and leadership needed, and the will of the state’s residents on its side to create a livable future for all in the face of climate change. 

SACRAMENTO, Calif. (AP) — California Gov. Gavin Newsom signed a pair of proposals Sunday aiming to help shield minors from the increasingly prevalent misuse of artificial intelligence tools to generate harmful sexual imagery of children.

The measures are part of California’s concerted efforts to ramp up regulations around the marquee industry that is increasingly affecting the daily lives of Americans but has had little to no oversight in the United States.

Earlier this month, Newsom also has signed off on some of the toughest laws to tackle election deepfakes, though the laws are being challenged in court. California is wildly seen as a potential leader in regulating the AI industry in the U.S.

The new laws, which received overwhelming bipartisan support, close a legal loophole around AI-generated imagery of child sexual abuse and make it clear child pornography is illegal even if it’s AI-generated.

Current law does not allow district attorneys to go after people who possess or distribute AI-generated child sexual abuse images if they cannot prove the materials are depicting a real person, supporters said. Under the new laws, such an offense would qualify as a felony.

“Child sexual abuse material must be illegal to create, possess, and distribute in California, whether the images are AI generated or of actual children,” Democratic Assemblymember Marc Berman, who authored one of the bills, said in a statement. “AI that is used to create these awful images is trained from thousands of images of real children being abused, revictimizing those children all over again.”

Newsom earlier this month also signed two other bills to strengthen laws on revenge porn with the goal of protecting more women, teenage girls and others from sexual exploitation and harassment enabled by AI tools. It will be now illegal for an adult to create or share AI-generated sexually explicit deepfakes of a person without their consent under state laws. Social media platforms are also required to allow users to report such materials for removal.

But some of the laws don’t go far enough, said Los Angeles County District Attorney George Gascón, whose office sponsored some of the proposals. Gascón said new penalties for sharing AI-generated revenge porn should have included those under 18, too. The measure was narrowed by state lawmakers last month to only apply to adults.

“There has to be consequences, you don’t get a free pass because you’re under 18,” Gascón said in a recent interview.

The laws come after San Francisco brought a first-in-the-nation lawsuit against more than a dozen websites that AI tools with a promise to “undress any photo” uploaded to the website within seconds.

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The problem with deepfakes isn’t new, but experts say it’s getting worse as the technology to produce it becomes more accessible and easier to use. Researchers have been sounding the alarm these past two years on the explosion of AI-generated child sexual abuse material using depictions of real victims or virtual characters.

In March, a school district in Beverly Hills expelled five middle school students for creating and sharing fake nudes of their classmates.

The issue has prompted swift bipartisan actions in nearly 30 states to help address the proliferation of AI-generated sexually abusive materials. Some of them include protection for all, while others only outlaw materials depicting minors.

Newsom has touted California as an early adopter as well as regulator of AI technology, saying the state could soon deploy generative AI tools to address highway congestion and provide tax guidance, even as his administration considers new rules against AI discrimination in hiring practices.