The Devastating Decline of Fast Food Jobs and Restaurant Closures Due to California’s $20 Minimum Wage

A trade group reports that almost 10,000 positions have been eliminated from businesses including Pizza Hut and Burger King, attributing these cuts directly to the increased labor costs from the wage hike.

This move highlights the financial strain the wage increase has placed on restaurant operations within the state.

They argue that this legislation has forced businesses to raise prices and struggle financially, significantly affecting their ability to operate profitably under the new wage conditions.

This bold move was intended to shed light on the severe repercussions for both small eateries and large chains.

He also referred to officials living in “fantasyland” by thinking the wage increases would help and that all it does it put businesses in jeopardy.

One notable example includes a McDonald’s franchisee who owns 18 locations in California, who is “considering reducing store hours, hiking menu prices and delaying renovations to offset the impact of the state’s $20 hourly minimum wage for fast-food workers.”

None of the fast food places seem to be value for money anymore, especially with places such as McDonald’s getting rid of its dollar menu.

It’s low-income families and individuals that have been hit the most by this, as when looking for something that is quick, cheap, and easy to eat, fast food is no longer the way.

Instead of quickly popping in to their nearest fast food restaurant for a quick bite to eat, people are now choosing to cook at home or even eat at traditional sit-down restaurants that were previously a lot more expensive.

These preemptive layoffs were attempts to mitigate the forthcoming financial strain anticipated from the wage increase.

As a result, they are now using other delivery services, such as Uber Eats and DoorDash.

In the same time period, private employment has declined by 0.2%, which shows the issue is very much with fast food and the minimum wage increase.

Thousands of workers had already been laid off before this increase, and some businesses also reduced their hours of operation to try to save money ahead of time.

These figures are currently difficult to tell because of the sheer number of people being fired, some people being hired, locations closing, and new locations opening.

However, this received a lot of backlash from restaurant industry organizations, who stated that raising it by this much could raise restaurant costs by $3 billion. This was when the idea of $20 an hour was put into law instead.

These restaurants include El Pollo Loco and Jack in the Box. Robots will be used to make salsa and cook fried foods.

This represents a 25 percent increase from the previous minimum wage of $16 an hour, which was instituted in January.

This disparity highlights the varying approaches to wage policies across different states, with California leading in aggressive wage adjustments.

McDonald’s traffic was down by 2.48%, Burger King by 3.86%, and In-N-Out by 2.59%. However, before the new minimum wage law came into effect, this traffic was above the national average.

His comments reflect the broader business community’s anxieties about the new wage law.

This quote captures the tension between rising operational costs and consumer price sensitivity.

Even though places such as Olive Garden still charge higher prices than McDonald’s, the gap between the two is so small that many believe they would be better off spending their money on casual dining than paying almost the same amount on fast food.

He said that the state was moving “one step closer to fairer wages, safer and healthier working conditions, and better training by giving hardworking fast food workers a stronger voice and seat at the table.”

Originally planned over five to ten years, the rollout is now expected to occur within the next 30 to 60 days, reflecting a shift towards more automated service systems to manage rising labor costs.