California is on the cusp of putting the fast-food industry into a curious economic experiment – mandating a custom minimum wage for larger restaurant chains.

Come April, fast food’s biggest players will be paying workers $20 hourly vs. 2024’s statewide $16 wage floor. The thinking behind the legislation is that the industry’s workers have long been underpaid, and a bold move was required to get these poorly compensated workers some hope of surviving California’s high cost of living.

Economic history tells me that this labor-intensive industry, despite all of its protests about the government’s hand in the cost of doing business, has managed to thrive.

Fast food lives in a consumer sweet spot: demand, convenience and relative affordability. And this pay hike – equal to minimum wage increases during the past five years – will create grand economic unknowns.

Will jobs be cut? Restaurants closed? Automation expanded? Will prices skyrocket? A mix of these? Or none of the above? Already we’ve seen Pizza Hut franchisees say they’ll cut 2,000 drivers statewide due to the wage hikes.

But you cannot ignore the other side of this equation.  As a workplace, fast food is a tough gig.

It’s typically part-time employment with challenging schedules and few, if any, benefits. This slice of food service workers is paid some of the state’s lowest wages. California food workers, by one federal calculation, earn $18 an hour on average vs. $35 for all workers statewide.

To understand this dichotomy, I filled my trusty spreadsheet with several employment and price stats for fast food – employment at limited-services restaurants; a California slice of the Consumer Price Index for dining out, and the minimum wage’s history.

What you see is that fast food is a significant, quick-growth industry. Limited-service restaurants employed 744,000 Californians in 2023 – that’s 4% of the state’s 18 million jobs.

And fast food’s addition of 431,000 workers since 1990 is nearly 8% of all California job growth. These worker additions are on par with the expansion of jobs in transportation and warehousing or local government.

Or look at it this way: Fast food’s 138% hiring spree since 1990 is triple the 44% job growth seen for all industries statewide.

That expansion happened as California’s minimum wage ballooned from $3.35 in 1990 to $15.50 last year. That’s a 363% jump in pay for the bottom-tier worker – nearly a fivefold pop. And it’s more than double the 167% jump in overall inflation.

And over the 33 years, dining-out costs for all kinds of eateries inflated only slightly more than the CPI – up 182%.

But look at fast food’s ebbs and flows over this third of a century, as I slice economic history into three chapters. Fast food’s quickest growth has come as wages and dining out costs jump the most.

1990-2000: $1 burger wars

This era featured big national chains battling for market share with a host of marketing ploys — from cheap food to big promotions for kids’ meals.

California fast food staffing grew by 107,000 or 34% growth, which doubled the statewide 16% hiring expansion. Fast food equaled 5% of the 2 million hires statewide.

This was a period where the minimum wage jumped 72% to $5.75 from $3.35. That was nearly double the 38% overall inflation rate.

But dining-out prices rose only 29% – likely due to the significant marketing battles of that era. Do you remember the $1 burgers and cheap taco promotions?

2001-2012: Double dips

Two recessions – one of legendary scope – cooled fast food and iced the rest of the California economy.

Still, the state’s fast food industry added only 79,000 jobs in this period or 19% growth. At the same time, however, all other bosses in total cut 37,500 California workers. Remember, the dot-com crash and the Great Recession throttled employers’ willingness to add staff in most industries.

In these economically uncertain times, the state’s minimum wage rose only 39% to $8 from $5.75. The bump was on par with the overall inflation rate.

Yet dining-out prices rose faster, a 43% increase, as busy consumers grew fonder of eating away from home.

2013-2023: The boom

Quick-serve eateries have flourished. Smaller chains brought new flavors and excitement to the industry as pandemic-era twists helped popularize take-out and delivery dining.

Fast food added 236,700 jobs or 47% growth – that’s 7% of all hires and double the statewide 22% hiring pace.

In this period, the minimum wage nearly doubled (to $15.50 from $8) vs. 39% overall inflation – most of that hike coming in the past two years.

Please note that dining-out prices jumped 53%, easily exceeding broader inflation.

Bottom line

Ponder fast food’s pricier competition, full-service dining.

From 1990 through 2015, staffing at these two styles of eating out moved essentially in tandem.

Eight years ago, when the state minimum wage was $9, full-service had 626,000 California workers – up 297,000 since 1990. Fast food staffing was 605,000 – up 292,000 in 25 years.

Fast-forward to 2023. Full-service added just 2,000 positions statewide in eight years. Fast food grew by 139,000.

This growth gap can be tied to everything from changing consumer demands to pandemic business restrictions to fast food’s price advantage.

But far costlier quick-serve meals seem to be a likely outcome of the coming higher minimum wage. Will that ultimately slow fast food’s growth, too?

Jonathan Lansner is business columnist for the Southern California News Group. He can be reached at jlansner@scng.com