QSRs cut 10,000 jobs owing to California’s $20 minimum wage law

Fast food outlets in California, US [quick service restaurants, or QSRs] have slashed almost 10,000 jobs in response to the state’s newly 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 criticised Governor Gavin Newsom for endorsing the legislation, which came into effect on 1 April 2024.

The law, first introduced in September 2023, requires restaurant chains with 60 or more locations nationwide to raise 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 hike.

Many have reduced employee hours, and others are accelerating the transition to automation.

Pizza Hut and Round Table Pizza, which operate around 400 outlets primarily on the West Coast, were anticipated to lay off 1,280 delivery drivers in 2024.

CABIA president and founder Tom Manzo was quoted by FOX Business as saying: “California businesses have been under total attack and total assault for years. It’s just another law that puts businesses in further jeopardy.

“Governments, unlike private businesses, have options when they run out of money”.

He went on to describe officials as “living in a ‘fantasyland’ by thinking that drastic wage increases will help workers or businesses.

“You can only raise prices so much. And you’re seeing it. People are not going to pay $20 for a Big Mac. It’s not going to happen.”

In the wake of rising labour costs attributed to the legislation, Navia Robotics and Nuwa Robotics recently formed a partnership to provide AI robotic solutions for restaurants.

They aim to assist businesses in managing these financial challenges through the deployment of restaurant robots.

“QSRs cut 10,000 jobs owing to California’s $20 minimum wage law” was originally created and published by Verdict Food Service, a GlobalData owned brand.

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