In response to recent minimum wage increases in California, fast food establishments statewide are embracing automation as a means to mitigate rising labor costs.
With the minimum wage for fast food workers in the state jumping from $16 to $20 per hour on April 1, restaurant owners are feeling the financial strain. To cope with this, many are turning to digital kiosks for customer orders, effectively reducing reliance on human employees.
Leading this shift towards automation is Harsh Ghai, a Burger King franchise owner overseeing 140 outlets along the West Coast. Ghai plans to implement digital kiosks across all his restaurants in a matter of months, a significant departure from his original timeline of five to 10 years. According to Ghai, the majority of the increased labor costs will be absorbed through inflation in food costs, leaving little room for compensation.
Approximately 25% of Ghai’s restaurants already utilize ordering kiosks, with plans for the remainder to follow suit within the next two months. This transition signals a stark reality for employees and their unions, who have advocated for wage increments.
Employees at well-known chains like Pizza Hut and Round Table pizza restaurants have already experienced job losses as management cites the unsustainable nature of the new wage costs. Meanwhile, major players in the fast food industry, including McDonald’s, Chipotle, and Starbucks, are considering price hikes as a means to offset increased expenses.