A large fast food franchise owner in California is rapidly installing self-order kiosks at 180 of his locations, including Burger Kings, Taco Bells and Popeyes, in response to the state’s new $20 minimum wage law.
The owner said kiosks are being put in every restaurant to help offset the higher payroll costs.
He is also cutting employee hours, limiting overtime and holding off on new openings.
Fast food chains are increasingly adopting kiosks as the minimum wage hike adds more urgency to reduce labor costs.
California’s $20 wage rule represents a 25% increase and gives a council power to mandate further 3.5% annual hikes.
“We are installing kiosks in every single restaurant,” franchisee Harsh Ghai said.
“Some fast-food franchisees say that the higher payrolls could make it challenging to remain profitable. Many are desperately looking for ways to bring in more revenues and cut costs,” the Insider wrote.
“Fast-food chains are rapidly deploying more order kiosks in the U.S. to reduce their labor costs. The new $20 wage in California has added even more urgency,” the Insider added.
While some may earn more, others are likely to lose jobs to automation or cuts. Minimum wage increases often eliminate the least skilled jobs that can’t support high wages.
A Foster’s Freeze location even shut down entirely due to the new mandate.
“The new rules raise the minimum wage by 25 percent for workers at large chain restaurants and establish a Fast Food Council that will have the power to implement further hikes up to 3.5 percent each year over the next five years,” the article stated.
“While some workers will receive raises, others are likely to lose their jobs to automation or cutbacks. Minimum wage hikes tend to eliminate jobs for the most vulnerable, least-skilled workers in jobs that do not produce enough revenue to support the high wage level,” it added.
