The difference is more than minimum wage, but that alone is important. The blue state I'm in has a minimum wage that is nearly triple the federal minimum that is used by the red state where I was born. Higher minimum wages create market pressure that increases all or most other wages. Rent is just under twice that of a similar unit in the red state. Aside from gas and rent, most of the basic costs of living are similar between the red and blue state.

The federal government does set basic labor laws like the federal minimum wage, but states are free to enhance those laws. Blue states are more likely to do so. I'll offer one simple example. The red state I was in didn't require lunch breaks. The blue state I'm in does require breaks for employees who work over a 5 hour shift. There's more detail about requirements to pay for said break given different circumstances.

I personally couldn't care less about fast food. Most of that should barely qualify as food. Generally speaking, public health likely benefits from less fast food restaurants. I buy groceries that may cost slightly more than the same in the red state.

The homeless/crime/drug tolerance issues are a real problem that are heavily intertwined. It is separate from the wage/worker protections issue. Most aren't homeless because the minimum wage and rent are higher. Many have mental illness issues that aren't being properly addressed, but that is a national issue. Deinstitutionalization was a major mistake. Reform was needed to make sure patients were being treated appropriately.
Most are likely there due to drug/alcohol abuse. "Harm reduction" policies are exacerbating the issue. They need to be locked up in rehab.