UC Berkeley Study Finds California’s $20 Fast-Food Wage Raised Pay, Barely Prices

Pizza Hut’s California franchise math has already been forced to change. Before the state’s $20 fast-food wage took hold, major franchisees PacPizza and Southern California Pizza Company were reported to be eliminating more than 1,200 delivery-driver jobs, a reminder that wage policy can show up first in staffing charts, delivery coverage and how many hours a store can realistically stay open.

That is the backdrop for a new University of California, Berkeley study that gives fast-food operators a mixed but important result: California’s $20-an-hour floor raised weekly pay for covered workers by about 10% to 11% without a measurable drop in employment, while prices increased only about 1.5%, or roughly six cents on a four-dollar item. For Pizza Hut managers trying to balance labor, service speed and menu pricing, that is not a theoretical finding. It suggests some of the cost can be absorbed, but not without pressure on the way stores run.

California put the $20 wage in place on April 1, 2024, for workers at large fast-food chains and snack and non-alcoholic beverage bars. The Berkeley paper says that floor equals about 69% of the state’s median full-time wage, a high bar for a sector built on thin margins and heavy turnover. The state’s general minimum wage later rose to $16.90 an hour on January 1, 2026, leaving the fast-food floor far above the baseline most other California employers must meet.

The policy landscape matters for Pizza Hut because franchise operators do not just decide wages. They decide whether to keep more labor in-house, lean harder on third-party delivery apps, trim hours, or simplify service in stores where every dollar matters. In California, that is especially true for a brand that depends on delivery demand but competes with DoorDash and Uber Eats for both customers and labor. A higher wage floor can help recruiting and retention, but it can also push managers toward tighter staffing and fewer delivery shifts if sales do not keep pace.

AB 1228, signed by Governor Gavin Newsom on September 28, 2023, created the Fast Food Council, which can raise wages annually by up to 3.5% or the consumer price index increase, whichever is smaller, and can vary wages by region. The council’s first public meeting was held in Oakland on March 15, 2024, after Newsom announced appointments on March 1. For Pizza Hut, that means California is no longer just one expensive state; it is a live test of whether a higher wage floor can coexist with the delivery-heavy, franchise-driven model that keeps the chain running.