Millions of Americans who are working full-time jobs still rely on federal health care and food assistance programs because of low wages, a bipartisan congressional watchdog says.

A report from the Government Accountability Office found that about 70% of adult workers participating in Medicaid, which provides health care to low-income Americans, and the Supplemental Nutrition Assistance Program, also known as food stamps, are working full time. Most worked for private sector employers in places like restaurants, department stores and grocery stores, according to the report.

More than 625 California fast food restaurant owners are warning the state’s new Fast Food Council that hiking their industry’s minimum wage above the $20 hourly rate imposed last year would “cripple thousands of small business owners” already struggling to stay afloat.

“We simply cannot survive another wage increase,” the restaurant owners wrote in a late-December letter to the council and its chair, Nicholas Hardeman.

One of the fundamental principles of economics is that if the price of something goes up, people will buy less of it. Californians are now learning the hard way that this principle applies to labor just as much as it does to any other good or service.

Last September, Gavin Newsom hailed the passage of a law that increased the already high $16-per-hour minimum wage in California to $20 per hour for fast-food workers at chains with more than 60 locations nationwide (the minimum wage for health-care workers is also being increased).

California fast-food restaurants have been forced to cut back on employee hours, shut down, or consider moving out of state completely because of Gov. Gavin Newsom's new $20-an-hour minimum wage law, a new study has shown.  

The Employment Policies Institute survey of nearly 200 fast-food companies found that 89 percent of those eateries polled have already been forced to reduce scheduled hours for their employees, less than a year since it was passed.

The federal minimum wage has basically become an outdated relic: It last went up to $7.25 on July 24, 2009 — 15 years ago.

Why it matters: Though very few people actually earn $7.25 an hour or less, the federal standard has ripple effects for all hourly workers — helping to keep pay low for millions.

The big picture: Look at the chart. In inflation-adjusted terms, the federal minimum wage is worth less now than at any time since 1949.

Across the United States, about half of all states raised their minimum wages in 2024. Most of those increases went into effect on January 1, while minimum wage hikes also went into effect in Nevada, Oregon, the District of Columbia and various localities on July 1. But the mandated pay increases aren’t necessarily good news. In particular, the recent wage hikes could deliver the most unintended consequences to the very people they most seek to help.

Fast-food chain Burger King will be debuting a new value meal ahead of schedule as competitor chains launch meal deals of their own. 

"We are bringing back our $5 ‘Your Way Meal’ as agreed upon with our franchisees back in April," a spokesperson for Burger King said on Thursday, May 23.

The news was first reported by Bloomberg News. 

California's $20 wage for fast food workers is just a few weeks old, and the effects on workers and customers are beginning to emerge.

At Chipotle, the law drove a 20% increase in wages for its restaurant staff in the Golden State, the company said during its earnings call on Wednesday.

To offset that cost, menu prices notched up about 6% to 7% for customers in California, CEO Brian Niccol said.

Restaurants for months have said menu prices in California would rise as the state raised the minimum wage for fast-food workers. Now they are following through.

Consumers picking up burgers, burritos and chicken sandwiches at chains in the Golden State are grappling with prices that for months have been rising at a faster clip than in other states, according to market-research firm Datassential. 

In response to recent minimum wage increases in California, fast food restaurants across the state are shifting to automation to get rid of wage-earning humans.

The move to making customers place orders at digital kiosks alleviates what owners say is the financial strain of rising labor costs after the minimum wage for the state’s fast food workers increased on April 1 from $16 to $20 per hour.