Fast food restaurants in California, USA [quick service restaurants, or QSRs] have cut nearly 10,000 jobs in response to the state’s recently implemented $20 minimum wage.
The figure was released by the Hoover Institution, a public policy think tank affiliated with Stanford University. Fox 5 News has reported.
The California Business and Industrial Alliance (CABIA) has criticized Governor Gavin Newsom for endorsing the legislation, which went into effect on April 1, 2024.
The law, first introduced in September 2023, requires restaurant chains with 60 or more locations across the country to increase their hourly wages from $16.21 to $20.
Major chains such as McDonald’s, Burger King and In-N-Out Burger have increased their prices to compensate for the wage increase.
Many have reduced workforces, and others are accelerating the transition to automation.
Pizza Hut and Round Table Pizza, which operate about 400 outlets mainly on the West Coast, are expected to lay off 1,280 delivery workers by 2024.
CABIA President and Founder Tom Manzo was quoted by FOX Business as saying, “California businesses have been targeted and attacked for years. It’s just another law that further puts businesses at risk.
“Governments, unlike private companies, have options when they run out of money.”
He then described civil servants as living in a ‘fantasy land’ in thinking that drastic pay increases will help workers or businesses.
“You can only increase prices to a limited extent. And you see it. People aren’t going to pay $20 for a Big Mac. It’s not going to happen.”
In the wake of rising labor costs attributed to the legislation, Navia Robotics and Nuwa Robotics recently formed a partnership to provide AI robotic solutions for restaurants.
They want to help companies overcome these financial challenges by using restaurant robots.
“QSRs to Cut 10,000 Jobs Due to California’s $20 Minimum Wage Law” was originally created and published by Verdict Food Service, a brand owned by GlobalData.
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