More fast food chains in California are strategizing how to cope with the impending increase in minimum wage, set to take effect next Monday, raising hourly pay for fast food workers from $16 to $20.
Executives from McDonald’s and Chipotle Mexican Grill have hinted at forthcoming menu price adjustments to offset the rise in labor costs.
El Pollo Loco, a California-based chain, disclosed plans to automate aspects of its salsa-making process, while Jack in the Box is reportedly experimenting with fryer robots and automated drink dispensers to reduce reliance on human staff, according to the Wall Street Journal.
In December, two major Pizza Hut franchise operators announced the termination of in-house delivery driver positions following the passage of Assembly Bill 1228, signed into law by Gov. Gavin Newsom in September.
The legislation, hailed as a critical measure for improving the cost of living, received support from approximately 700,000 quick-service restaurant workers in California, leading to the formation of a statewide union last month.
Alexander Johnson, whose family operates multiple Auntie Anne’s and Cinnabon locations in California, disclosed reducing staff by around 10 employees, with his elderly parents returning to work to mitigate labor expenses.
Meanwhile, Excalibur Pizza, owner of Round Table Pizza locations, revealed plans to eliminate 73 driver positions by mid-April, as per a state WARN notice.
While adjustments are inevitable for all fast food operators facing increased costs, the extent of potential industry-wide job cuts remains uncertain.
Consumer reporter David Lazarus from KTLA 5 News suggests that the challenges confronting fast-food operators stem from their own success, emphasizing the need for a reevaluation of the industry’s business model to ensure fair wages without compromising affordability.