Last updated Nov 29, 2025
economytech
As a result of California’s fast-food wage law raising effective minimum wages for large chains from about $15 to $22, big chain restaurants operating in California will increase their use of automation and correspondingly reduce the number of low-wage human workers they employ in that subsector, relative to what they would have employed absent the law.
the unintended consequence that is talking about is that these big chain restaurants are going to rely even more heavily on automation now, and they're going to basically employ less of this labor where the price has been artificially raised for that subsector of the economy from 15 to $22View on YouTube
Explanation

There is now a California fast‑food–specific minimum wage: AB 1228 raised the minimum for workers at large fast‑food chains (60+ locations) to $20/hour starting April 1, 2024, up from the statewide $16 floor, with a Fast Food Council empowered to adjust it further. 【2†turn2search7】【3†turn3search1】 That is slightly different from the $15→22 path Sacks discussed, but it is the policy closest to what he was describing.

Employment effects ("employ less of this labor relative to what they would have absent the law"):

Support for the prediction

  • A 2025 National Bureau of Economic Research (NBER) working paper finds that California fast‑food employment fell about 2.7–3.6% from Sept 2023 to Sept 2024 relative to the fast‑food sector in other states, implying roughly 18,000 fewer jobs than in a no‑law counterfactual. 【3†turn3search2】【3†turn3search7】 This directly supports the claim that covered chains employed fewer low‑wage workers than they otherwise would have.
  • Industry‑commissioned analyses using BLS data (e.g., Berkeley Research Group, Employment Policies Institute) also report on the order of 10,000–16,000 fast‑food jobs lost in California between mid‑2023 and mid‑2024, with results framed as an effect of the $20 wage. 【2†turn2search3】【3†turn3search9】【2†turn2search10】

Evidence against or questioning the prediction

  • Multiple studies from UC Berkeley’s Institute for Research on Labor and Employment and related researchers (including a 2025 policy brief) report no detectable negative effect on fast‑food employment or hours from the $20 wage, while finding substantial wage gains and only modest price increases. 【3†turn3search5】【3†turn3search6】【3†turn3search8】【3†turn3search3】【3†turn3search4】
  • News coverage and official summaries highlight this split: some outlets emphasize the NBER job‑loss estimates, 【3†turn3search1】【3†turn3search7】 while others cite the Berkeley findings to argue there has been little or no employment contraction. 【3†turn3news15】

Because credible, methodologically serious studies reach opposite conclusions on whether fast‑food employment is below its no‑law counterfactual, the job‑loss component of Sacks’s prediction cannot be judged definitively true or false.

Automation effects ("rely even more heavily on automation"):

  • Several reports and industry/advocacy studies state that, in response to the $20 minimum, California fast‑food and quick‑service restaurants have accelerated adoption of self‑service kiosks, AI drive‑thru systems, and kitchen robotics, explicitly as a way to offset higher labor costs. 【2†turn2search3】【2†turn2search4】【3†turn3search9】【2†turn2search8】 Broader restaurant‑industry coverage also notes increased use of kiosks, AI voice assistants, and robots, particularly in high‑wage markets like California. 【2†turn2news16】
  • However, automation in fast food was already a strong nationwide trend driven by technology and post‑pandemic labor constraints, and there is no rigorous, causal study that cleanly isolates how much additional automation in California’s large chains is attributable specifically to AB 1228 versus these broader forces.

Given:

  • The mixed, conflicting evidence on whether fast‑food employment in California is lower than it would have been without the law, even in formal econometric work, and
  • The largely anecdotal and non‑causal evidence on how much the law, specifically, increased automation above the existing trend,

we cannot say with confidence that Sacks’s prediction has clearly come true or clearly failed. Enough time and data have passed to study the issue, but the results are genuinely contested and the automation effect is not well quantified. On balance, the prediction’s status is ambiguous rather than clearly right or wrong.