US quick service restaurants (QSRs) have cut almost 10,000 jobs in California because the state’s new $20 minimum wage made them less profitable.
Fox 5 News reported that the number came from the Hoover Institution, a public policy think tank at Stanford University.
The California Business and Industrial Alliance (CABIA) doesn’t like that Governor Gavin Newsom supported the law that went into effect on April 1, 2024.
Since September 2023, the law has said that restaurant chains with 60 or more sites across the country must raise their hourly wages from $16.21 to $20.
Because wages went up, big chains like McDonald’s, Burger King, and In-N-Out Burger raised their prices to make up for it.
Many have cut back on employee hours, and others are speeding up the process of automating tasks.
In 2024, Pizza Hut and Round Table Pizza, which together have about 400 locations mostly on the West Coast, planned to let go of 1,280 delivery drivers.
This is what FOX Business said about CABIA president and founder Tom Manzo: “California businesses have been under total attack and total assault for years.” Businesses are already in a lot of trouble because of this law.
“When governments run out of money, they don’t have to do what private businesses do.”
He then said that leaders who think that big wage increases will help workers or businesses are “living in a fantasy.”
“Prices can only go up so much.” You can see it. A Big Mac won’t cost $20. It’s not going to happen.
Because of the new law, the cost of labor is going up. To help businesses, Navia Robotics and Nuwa Robotics have joined forces to offer AI-based robotic solutions.
By putting restaurant robots to work, they hope to help businesses deal with these money problems.
“QSRs cut 10,000 jobs because of California’s $20 minimum wage law” was first written and shared by Verdict Food Service, a brand owned by GlobalData.
Source: Yahoo Finance